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CALIFORNIA 
BANK   ACT 


AS    AMENDED    1913 


THm   EDITION   SSSUe©    ©¥ 
CALJFORNiA     BANKERS     ASSOCIATIOM 


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'Am 

>v  Jim 


BANK  ACT 

OF  THE 

STATE  OF  CALIFORNIA 

(WITH  COMPLETE  INDEX) 


STATUTES  OF  1909 

Chapter    76,  Approved  March  i .  In  Effect  July    i 
AMENDED  BY  STATUTES  OF  1911 

Chapter     11,  Approved  Feb.    6.  In  Effect  Feb.   6. 

Chapter  488,  Approved  Apr.  21.  In  Effect  June  20. 

Chapter  494,  Approved  Apr.  21.  In  Effect  June  20. 

Chapter  495,  Approved  Apr.  21.  In  Effect  June  20. 

AMENDED  BY  STATUTES  OF  1911  (Special  Session) 

Chapter      2,  Approved  Dec.  18.     In  Effect  Feb.  16. 
Chapter    24,  Approved  Dec.  24.     In  Effect  Feb.  22. 

AMENDED  BY  STATUTES  OF  1913 

Chapter  104,  Approved  May  q.      In  Effect  Aug.  10. 
Chapter  192,  Approved  June  3.      In  Effect  Aug.  10. 


Revised  Edition  Issued  By 

CALIFORNIA  BANKERS  ASSOCIATION 
JUNE,  1913 


MEMBERS  OF  THE  CALIFORNIA 
BANKERS  ASSOCIATION  MAY  SE- 
CURE ADDITIONAL  COPIES  OF 
THIS  PAMPHLET  BY  ADDRESSING 
FREDERICK  H.  COLBURN.  SEC- 
RETARY. I064  MILLS  BUILDING. 
SAN      FRANCISCO.       CALIFORNIA 


I  \\sr     «-  "f  •^  e> 


BANK   ACT  OF   CALIFORNIA. 


ARTICLE  I. 

GENERAL  PEOVISIONS. 

Section  1 .     This  act  shall  be  known  as  the  "bank  act,"  and  Name  of  Act 
shall  be  applicable  to  all  corporations  specified  in  the  next 
section. 

Sec.  2.     The  word  "bank"  as  used  in  this  act  shall  be  Definition  of  Bank 
construed  to  mean  any  incorporated  banking  institution  which 
shall  have  been  incorporated  to  conduct  the  business  of  receiv- 
ing money  on  deposit,  or  transacting  a  trust  business  as  herein- 
defined.     The  soliciting,  receiving  or  accepting  of  money  or  what  acts  deemed- 
its  equivalent  on  deposit  as  a  regular  business  shall  be  deemed  banking  business 
to  be  doing  a  commercial  or  savings  bank  business  whether  such 
deposit  is  made  subject  to  check  or  is  evidenced  by  a  certifi- 
cate of  deposit,  a  pass  book,  a  note,  a  receipt  or  other  writing ; 
provided,  that  nothing  herein  shall  apply  to  or  include  money 
or  its  equivalent  left  in  escrow  or  left  with  an  agent,  pending 
investment  in  real  estate  or  securities  for  or  on  account  of  his  Transacting  banking 
principal.     It  shall  be  unlawful  for  any  corporation,  partner-  business  otherwise 

,  \.  ......  .  11'  *ban  by  means  of  a 

ship,  firm  or  mdividual  to  engage  m  or  transact  a  bankmg  banking  corporation — 
business  within  this  state  except  by  means  of  a  corporation  ^^^^^^ 
duly  organized  for  such  purpose.    Banks  are  divided  into  the  classification  of  banks 
following  classes: 

(a)  Savings  banks; 

(b)  Commercial  banks;  and 

(c)  Trust  companies. 

Sec.  3.     Corporations  may  be  formed  by  any  number  of  Method  of  forming 
natural  persons,  not  less  in  any  case  than  three,  under  the  banking  corporation 
laws  of  this  state  to  conduct,  as  provided  in  this  act,  and  not 


4  CALIFORNIA  BANK  ACT  ^ 

Otherwise,  any  one  or  more  or  all  of  the  businesses  mentioned 
in  divisions  (a),  (b),  and  (c)  of  section  two,  of  this  act. 
-Savings  bank"         Sec.  4.    The  term  "savings  bank,"  when  used  in  this  act, 
defined  means  a  bank  organized  for  the  purpose  of  accumulating  and 
loaning  the  funds  of  its  members,  stockholders,  and  depositors, 
and  which  may  loan  and  invest  the  funds  thereof,  receive 
deposits  of  money;  loan,  invest  and  collect  the  same  with 
interest;  and  may  repay  depositors  with  or  without  interest, 
and   having  power  to  invest  said  funds   in   such  property, 
securities  and  obligations  as  may  be  prescribed  by  this  act ;  and 
to  declare  and  pay  dividends  on  its  general  deposits,  and  a 
stipulated  rate  of  interest  on  deposits  made  for  a  stated  period 
or  upon  special  terms. 
"Commercial  bank"         Sec.  5.    The  term  "commercial  bank,"  when  used  in  this 
act,  means  any  bank  authorized  by  law  to  receive  deposits  of 
money,  deal  in  commercial  paper  or  to  make  loans  thereon, 
and  to  lend  money  on  real  or  personal  property,  and  to  discount 
bills,  notes,  or  other  commercial  paper,  and  to  buy  and  sell 
securities,  gold  and  silver  bullion,  or  foreign  coins  or  bills  of 
exchange. 
"Trust  Company"         Sec.  6.     The  term  "trust  company,"  when  used  in  this  act, 
defined  j^^^ns  any  corporation  which  is  incorporated  under  the  laws  of 
this  state  for  the  purpose  of  conducting  the  business  of  acting 
as  executor,  administrator,  guardian  of  estates,  assignee,  re- 
ceiver, depositary  or  trustee  under  appointment  of  any  court 
or  by  authority  of  any  law  of  this  state,  or  as  trustee  for  any 
purpose  permitted  by  law. 
Foreign         3ec.  7.     No  foreign  corporation  shall  transact  a  banking 

corporations  .  ...  .  ,  ^  ,    .  •  i        ,«      i 

—prerequisites  to  busmess  m  this  State  without  first  complying  with  all  the 
transacting  banking  requirements  of  the  laws  of  this  state  relative  to  banks  as 

business  m  tms  state     ,*,.,.  i  •  i  i        •  •  < 

defined  m  this  act,  and  without  having  assigned  to  its 
business  in  this  state  the  amount  of  paid-up  capital 
and  surplus  required  by  this  act  for  the  transaction  of 
such  business  within  this  state.  No  foreign  banking  cor- 
poration shall  transact  business-  in  this  state  until  such 
corporation  has  made  the  assignment  of  capital  required  by 
this  section  and  has  received  a  certificate  from  the  super- 
intendent of  banks.    Any  foreign  banking  corporation  trans- 


GENERAL    PROVISIONS  5 

acting  business  in  this  state  shall  become  subject  to  the  Foreign  corporaUons 
supervision  of  the  state  superintendent  of  banks.     Every  ~*o"^*""®^ 
foreign  banking  corporation,  including  those  which  were 
on  January  second,  nineteen  hundred  thirteen,  transacting  Such  corporation  doing 

,         .  •       j^i   •         J     ^  1  •    1  •  1  'a  ,  domestic  business 

business  in  this  state,  which  receives  any  deposits  or  trans-  subject  to  supervision 

acts  any  other,  banking  business  or  transacts  its  business  of  Superintendent. 

in  such  a  manner  as  might  lead  the  public  to  believe  that  its 

business  is  that  of  a  bank  shall  conduct  all  its  business  in 

accordance  with  the  statutes  governing  incorporated  banking 

institutions  organized  under  the  laws  of  this  state.  The  capital  ^^^'^^^  assigned  to  its 

.  .  .  ,  .  .      business  in  this  state, 

of  any  such  foreign  banking  corporation  assigned  to  its  busi-  etc,  to  be  kept  separate 

ness  in  this  state  and  all  funds  and  deposits  of  money  received 

by  any  such  corporation  in  this  state  or  for  or  in  connection 

with  its  business  in  this  state  and  all  accounts  and  transactions  Accounts  of  business 

.         .  ^    ,        .  .       .         .  .  transacted  in  this  state 

of  said  business  transacted  by  any  such  foreign  corporation  to  be  kept  separate 
in  this  state  shall  be  kept  separate  and  apart  from  the  general  ^^°"^  ^^°^^^  accounts 
business,  assets  and  accounts  of  such  foreign  corporation  in 
the  same  manner  as  if  the  business  of  such  foreign  corpora- 
tion conducted  within  this  state  was  that  of  a  separate  and 
independent  corporation  organized  under  the  laws  of  this 
state  for  the  purpose  of  doing  a  banking  business  and  all  of 
the  provisions  of  this  act  affecting  investments,  loans  of  ^°^"s  ^^'^^  ^y  foreign 

.     .  1  .  -  ,  .  ,         •  .  corporation — ^their 

money,  receiving  deposits  and  conducting  business  in  any  basis  and  security 
respect  shall  be  deemed  to  apply  to  such  assigned  capital, 
investments,  loans,  deposits,  assets,  funds  and  business  in 
the  same  manner  as  if  such  assigned  capital,  investments, 
loans,  deposits,  assets,  funds  and  business  were  that  of  such 
separate  and  independent  corporation;  provided,  that  loans 
may  be  made  by  any  such  foreign  corporation  based  on  its 
entire  paid-up  capital  and  surplus  in  case  such  foreign  corpo- 
ration shall  have  assigned  to  its  business  in  this  state  a  paid-up 
capital  and  surplus  as  above  provided  equal  to  20  per 
centum  of  the  deposit  liability  of  such  branch  agency 
or  office  to  residents  of  this  state.  Such  funds  and 
investments  or  loans  thereof  shall  be  appropriated  solely  to 
the  security  and  payment  of  such  deposits,  and  shall  not 
be  mingled  with  the  investments  of  the  capital  stock  or  other 
money  or  property  belonging  to  such  corporation  or  be 
liable  for  the  debts  or  obligations  thereof.    All  income  re- 


5  CALIFORNIA  BANK  ACT 

Foreign  corporations  ccived  from  the  investment  of  said  funds  over  and  above 
—continued  ^^^^  funds  as  may  be  paid  to  depositors  as  interest  or  shall 
Application  of  \yQ  carried  to  the  surplus  fund,  as  provided  in  section  twenty-one 
investmeS^funS  of  this  act,  shall  acprue  as  profits  to  the  corporation  and  may  be 
transferred  to  its  general  funds.    No  such  foreign  corpora- 
Further  prerequisite  tion  shall  transact  any  banking  business  in  this    state    until 
'^i'^apSme^  ^*  ^^^  executed  and  filed  with  the  superintendent  of  banks  a 
of  Supt.  as  attorney  written  instrument  appointing  such  superintendent  or  his 
'procIZ^'etc!  successor  in  office,  its  true  and  lawful  attorney,  upon  whom 
all  process  issued  by  authority  of  or  under  any  law  of  this 
state  may  be  served,  with  the  same  effect  as  if  such  cor- 
poration was  formed  under  the  laws  of  this  state  and  had 
been  lawfully  served  with  process  therein.     Such  service 
upon  such  attorney  shall  be    deemed    personal    service    on 
such  corporation.    The  superintendent  of  banks  shall  forth- 
with forward  by  mail,  postage  prepaid,    a    copy    of    every 
process  served  upon  him  under  the  provisions  of  this  section, 
addressed   to   the    manager   or   agent    of    such   corporation, 
at  its  principal  place  of  business  in  this  state.     For  each 
copy  of  process,  the  superintendent  of  banks  shall  collect 
the  sum  of  two  dollars,  which  shall  be  paid  by  the  plaintiff 
or  moving  party  at  the  time  of  the  service,  to  be  recovered 
by  him  as  a  part  of  his  taxable  costs  if  he  succeed  in  the  suit 
Foreign  corporation  Of  proceeding.    No  foreign  corporation  shall  have  or  exer- 
'''''TomplnyZoZ's  cise  in  this  state  the  power  to  receive  deposits    of    trust 
specified  in  Sec.  6.  moneys,  securities  or  other  personal  property  from  any  per- 
tmstTompfnii  may  son  or  Corporation  or  any  of  the  powers  specified  in  section 
act  as  executor  or  six  of  this  act,  nor  havc  or  maintain  an  office  in  this  state 

trustee  under  will,    -,,  .  -  ««,i  >      f         .t 

provided  (1)  simUar  ^OT  the  transaction  of,  or  transact,  directly  or  indirectly,  any 
privilege   given  such  or  similar  business,  except  that   a  trust  company  incor- 

Califomia  companies  •  i  i 

in  foreign  states  poratcd  ju  another  state  may  be  appointed  and  may  accept 
appointment  and  may  act  in  this  state  as  executor  of  or  trustee 
under  the  last  will  and  testament  of  any  deceased  person,  upon 
giving  the  bond  required  in  such  cases  of  individuals  un- 
less waived  by  the  last  will  and  testament  making  such 
appointment  and  by  taking  and  subscribing  an  oath  for  faithful 
performance  of  such  trust  by  the  president,  vice-president, 
secretary,  manager  or  trust  officer  of  said  corporation;  pro- 
vided, that  similar  corporations  organized  under  the  laws  of 


GENERAL   PEOVISIONS  7 

this  state  are  permitted  by  law  to  act  as  such  executor  or  trus-  Foreign  corporations 
tee  in  the  state  where  such  foreign  corporation  was  organized ; 
and,  provided,  further,  that  such  superintendent  of  banks,  for  acting  as  executor  or 
the  time  being,  shall  be  the  attorney  of  such  foreign  corporation  st^te^ontlnued 
qualifying  or  acting  in  this  state  as  such  executor  or  trustee, 
upon  whom  process  against  such  foreign  corporation  may  be 
served  in  any  action  or  legal  proceeding  against  such  executor 
or  trustee  affecting  or  relating  to  the  estate  or  property  repre- 
sented   or    held    by    such    executor    or    trustee,    or    any 
act    or    default    of    such    foreign    corporation    in    reference 
to  such  estate  or  property,  and  it  shall  be  the  duty  of  any 
such  foreign  corporation  so  qualifying  or  acting  to  file  in  (2)  such  foreign 
the  office  of  said  superintendent  of  banks  a  copy  of  its  arti-  suXcertifieTc^y^of 
cles  of  incorporation,  or  of  the  statute  chartering  such  cor-  articles,  etc. 
poration,  certified  by  its  secretary  under  its  corporate  seal, 
together  with  the  post  office  address  of  its  home  office,  and 
a  duly  executed  appointment    of    said    superintendent    of 
banks  as  its  attorney  to  accept  service  of  process  as  above 
provided,  and  said  superintendent  of  banks,  when  any  such 
process  is  served  upon  him,  shall  at  once  mail  the  papers  so 
served  to  the  home  office  of  such  corporation ;  and  provided,  <^)  No  foreign  corpora- 

,        ,  ,  .        .  .         ,        .  ,        .  tion  having  authority 

further,  that  no  foreign  corporation  having  authority  to  act  as  to  act  as  executor  or 
executor  of  or  trustee  under  the  last  will  and  testament  of  ^^"-^^^  '^^^^  ^"  ^^^^ 

,  .,.,  ..,.  ,  maintain  any  branch 

any  deceased  person  shall  establish  or  maintain,  directly  or  office  or  agency  in  this 
indirectly,  any  branch  office  or  agency  in  this  state,  or  shall  ^tate  or  solicit  business 

.  .     , .  ,  -        .  as  executor  or  trustee 

in  any  way  solicit,    directly  or  indirectly,    any    business    as  therein 

executor  or  trustee  therein,  and  that  for  any  violation  of 

this  proviso,  the  court  having  jurisdiction  of  such  executor  penalty 

or  trustee  in  said  proceeding  may  in  its  discretion,  revoke 

the  right  of  such  foreign  corporation  thereafter  to  act  as 

executor  or  trustee  therein ;  provided,  that  nothing  in  this  act  Act  not  to  affect  right 

shall  limit  or  affect  the  right  of  any  foreign  corporation  doing  ^^J^^^Zon^nT'"^ 

a  banking  business  in  this  state,  to  lend  within  this  state,  forming  part  of  its 

moneys  of  such  corporation  which  do  not  form  a  part  of  the  ^J^neit'tSf state 

moneys,  deposits  or  assets  of  such  corporation  assigned  or 

belonging  to  its  business  in  this  state. 

Sec.  8.     Every  corporation,  at  the  time  it  applies  for  a 
certificate  of  authority  to  do  a  banking  business,  must  file  with 


8  OALIFOBNIA  BANE  ACT 

Requirements  imposed  the  Superintendent  of  banks  a  certified  copy  of  its  articles  of 

"^tion^r^iyS'°for  incorporation,  or  of  the  statute  chartering  such  corporation, 

certificate  of  authority  ^  certified  copy  of  its  by-laws,  and  also  a  certified  copy  of 

to  do  a  banking  .  ,  .    ,  -    . 

busines  all  instruments  amending  or  altering  such  articles  of  incor- 
poration   or    charter    or    by-laws.      Thereafter    a   certified 
copy  of  each  amendment  or  certificate  shall  likewise  be  so 
filed  before  such  instrument  takes  effect.    There  must  also 
be  filed  in  the  office  of  the  superintendent  of  banks  before 
he  shall  issue  his  certificate  a  certified  copy  of  the  affidavit 
required  by  section  two  hundred  ninety  a  of  the  Civil  Code. 
Each  certification  required  by  the  provisions  of  this  section 
other  than  that  of  by-laws  must  be  by  the  secretary  of  state. 
Branch  banks        Sec.  9.     No  bank  in  this  state,  or  any  officer  or  director 
thereof,  shall  hereafter  open  or  keep  an  office  other  than  its 
principal  place  of  business,  without  first  having  obtained  the 
Prerequisites  for  written  approval  of  the  superintendent  of  banks  to  the  open- 
opemng  .^^  ^^  ^^^^  branch  office,  which  written  approval  may  be 
given  or  withheld  in  his  discretion,  and  shall  not  be  given  by 
him  until  he  has  ascertained  to  his  satisfaction  that  the  public 
convenience  and  advantage  will  be  promoted  by  the  opening 
Capital  required  of  such  branch  off icc ;  provided,  that  no  bank  or  any  officer 
or  director  thereof,  shall  open  or  maintain  any  such  branch 
office  unless  the  capital  of  such  bank,  actually  paid  in,  in  cash, 
shall  exceed  the  amount  required  by  this  act  by  the  sum  of 
twenty-five  thousand  dollars  for  each  branch  office  opened  and 
maintained.   Every  bank,  before  it  opens  a  branch  office,  shall 
obtain  the  certificate  of  authority  of  the  superintendent  of  banks 
$50  fee  for  certificate  for  the  Opening  of  cach  of  said  branch  offices.   The  applicant 
shall  pay  for  such  certificate  a  fee  of  fifty  dollars;  provided, 
School  savings  however,  that,  in  order  to  encourage  saving  among  the  children 
of  the  schools  of  this  state,  a  bank  may,  with  the  written  consent 
of  and  under  regulations  approved  by  the  superintendent  of 
banks  and,  in  the  case  of  public  schools,  by  the  board  of  educa- 
tion or  board  of  school  trustees  of  the  city  or  district  in  which 
Bank  may  arrange  for  the  school  is  situated,  arrange  for  the  collection  of  savings  from 
'°"  btTefcrrsHfc!  t^^  school  children  by  the  principal  or  teachers  of  such  schools 
or  by  collectors.    The  principal,  teacher  or  person  authorized 
by  the  bank  to  make  collections  from  the  school  children  shall 


GENEEAL    PEOVISIONS  9 

be  deemed  to  be  the  agent  of  the  bank  and  the  bank  shall  be  Branch  banks- 
liable  to  the  pupil  for  all  deposits  made  with  such  principal, 
teacher  or  other  person,  the  same  as  if  the  deposits  were  made 
by  the  pupil  directly  with  the  bank.  Every  bank  and  every  Penalty 
such  officer  or  director  violating  the  provisions  of  this  section 
shall  forfeit  to  the  people  of  the  state  the  sum  of  one  hundred 
dollars  for  every  day  during  which  any  branch  office  hereafter 
opened  shall  be  maintained  jvithout  such  written  approval. 

Sec.  10.     No  person  shall  be  eligible  for  election  as  direc-  Directors 
tor  of  a  bank  having  a  capital  stock  unless  he  is  a  stockholder 
of  the  bank,  owning,  in  his  own  right,  shares  thereof  of  the  Qualifications  for 
par  value  of  at  least  five  hundred  dollars;  and  every  person  anceTn°office^°'^* °^' 
elected  to  be  director  who,  after  such  election,  shall  cease  to  be 
the  owner  in  his  own  right  of  the  amount  of  such  stock  afore- 
said, or  shall  hypothecate  or  in  any  way  pledge  such  stock  as 
security  for  any  loan  or  debt  shall  immediately  notify  the  su- 
perintendent of  banks  in  writing  of  such  sale  or  hypothecation 
and  such  director  may  be  removed  from  the  office  of  director 
by  the  superintendent  of  banks.    If  a  bank  be  organized  with- 
out capital  stock,  no  person  shall  be  eligible  as  a  director 
thereof  unless  he  is  both  a  member  and  a  depositor  of  such 
bank. 

Sec.  11.     The  board  of  directors  of  a  bank  must  hold  a  Directors  meetings 
meeting  at  least  once  a  month.    Each  director,  when  appointed 
or  elected,  shall  take  an  oath  that  he  will,  so  far  as  the  duty  oath  of  directors 
devolves  on  him,  diligently  and  honestly  administer  the  affairs 
of  such  bank,  and  will  not  knowingly  violate  or  wilfully  permit 
to  be  violated  any  of  the  provisions  of  law  applicable  to  such 
bank,  and  that  he  is  the  owner  in  good  faith  and  in  his  own 
right  of  shares  of  stock  of  the  par  value  required  by  section 
ten  of  this  act,  subscribed  by  him  or  standing  in  his  name  on 
the  books  of  the  bank,  and  that  the  same  to  an  amount  equal  to 
the  par  value  of  at  least  five  hundred  dollars,  are  not  hypothe- 
cated or  in  any  way  pledged  as  security  for  any  loan  or  debt. 
Such  oath  shall  be  subscribed  by  the  director  making  it,  certi-  oath  to  be  filed  with 
fied  by  the  officer  before  whom  it  is  taken,  and  immediately  Superintendent. 
transmitted  to  the  superintendent  of  banks  and  filed  and  pre- 
served in  his  office. 


10  CALIFOBNIA  BANE  ACT 

No  unauthorized  Sec.  12.  No  pcrson,  firm,  company,  copartnership  or  cor- 
^poraSon.'^TtcT  s'hai'i  poration,  either  domestic  or  foreign,  not  subject  to  the  super- 
advertise  a  banking  yision  of  the  Superintendent  of  banks,  and  not  required,  by  the 

business  or  do  acts  .   .  r  .t  •  i  .  ••».,. 

inducing  pubuc  to  provisions  of  this  act,  to  report  to  him,  and  which  has  not  re- 
beiieve  that  business  ceivcd  a  certificate  to  do  a  banking:  business  from  the  suoer- 

is  that  of  bank  or    .  ,  /■  ,        i  i     it       «  .         ,         , 

trust  company  intendent  of  banks,  shall  advertise  that  he  or  it  is  receiving  or 
accepting  money  or  savings,  and  issuing  notes  or  certificates 
of  deposit  therefor,  or  shall  make  use  of  any  office  sign,  at 
the  place  where  such  business  is  transacted,  having  thereon  any 
artificial  or  corporate  name,  or  other  words  indicating  that  such 
place  or  office  is  the  place  or  office  of  a  bank  or  trust 
company,  that  deposits  are  received  there  or  payments 
made  on  check,  or  any  other  form  of  banking  busi- 
ness transacted,  nor  shall  any  such  person  or  persons, 
firm,  company,  copartnership  or  corporation,  domestic 
or  foreign,  make  use  of  or  circulate  any  letterheads, 
billheads,  blank  notes,  blank  receipts,  certificates  or  circulars, 
or  any  written  or  printed,  or  partly  written  and  partly  printed, 
Unauthorized  use  paper,  whatever,  having  thereon  any   artificial  or  corporate 

of  title  containing  ^-  ,  .....  ,  <     <        . 

word  "bank."  name  or  other  word  or  words  indicating^  that  such  business  is 
"banker,"  etc..  "sav-  the  busincss  of  a  bank,  savings  bank  or  trust  company:  nor 

ings   bank."   etc..     ,     „  ,  n  i- 

"trust"  or  "trust  Shall  any  such  person,  firm,  company,  copartnership  or  cor- 
company."  forbidden  poratiou,  or  any  agent  of  a  foreign  corporation  not  having  an 
established  place  of  business  in  this  state,  solicit  or  receive  de- 
posits or  transact  business  in  the  way  or  manner  of  a  bank, 
savings  bank  or  trust  company,  or  in  such  a  way  or  manner 
as  to  lead  the  public  to  believe  that  its  business  is  that  of  a 
bank,  savings  bank  or  trust  company.  Nor  shall  any  person, 
firm,  company,  copartnership  or  corporation,  domestic  or  for- 
eign, not  subject  to  the  supervision  of  the  superintendent  of 
banks,  and  not  required  by  the  provisions  of  this  act  to  re- 
port to  him,  and  which  has  not  received  from  the  superintend- 
ent of  banks  a  certificate  to  do  a  banking  business,  hereafter 
transact  business  under  any  name  or  title  which  contains  the 
word  "bank,"  or  "banker,"  or  "banking,"  or  "savings  bank," 
or  "savings"  or  "trust"  or  "trustee"  or  "trust  company" ;  pro- 
Section  shall  not  z/ided,  that  this  section  shall  not  apply  to  the  corporate  name 

apply  to  name  of       ,  ,      .,  i-  ,   ,  .      .  ,  <- 

existing  building  and  of  any  buildiug  and  loan  association  now  or  heretofore  doing 
loan  association  business  in  this  state ;  and  promded,  further,  that  any  such  asso- 


GENEEAL    PROVISIONS  U 

ciation  having  in  its  corporate  name  words  not  clearly  indi-  Nature  of  business  of 
eating  the  nature  of  its  business  shall,  on  all  signs,  letter  heads  aiodatioT  mu^  be 
and  advertising  matter,  state  "This  is  a  building  and  loan  asso-  ^^°'^  ®^*^®^  ^^  ^*^ 

title  or  advertising 

ciation     or  words  to  that  effect;  and  provided,  further,  that 
any  building  and  loan  association  may  borrow  money,  issue 
investment  certificates  or  evidences  of  indebtedness,  stating  the 
rate  of  interest  and  terms  and  conditions  of  repayment,  and  do 
such  other  business  as  may  be  authorized  by  the  laws  of  the 
state  relating  to  building  and  loan  associations ;  and  provided,  No  b.  &  l.  Assn. 
further,  that  no  such  association  shall  advertise  or  hold  itself  L  a  sa^ngs^aijT 
out  to  the  public  as  a  savings  bank.  Any  person,  firm,  company, 
copartnership  or  corporation,   domestic  or  foreign,  violating  Penalty 
any  provision  of  this  section  shall  forfeit  to  the  state  one  hun- 
dred dollars  a  day  for  every  day  or  part  thereof  during  which 
such  violation  continues.    Upon  action  brought  by  the  super-  injunction  issuable 
intendent  of  banks  the  court  may  issue  an  injunction  restrain-  restraining  acts  in 

,  ^  .  1  .  violation  of  this 

mg  any  such  person,  firm,  company,  copartnership  or  corpora-  section,  etc. 
tion  from  further  using  such  words  in  violation  of  the  provi- 
sions of  this  section  or  from  further  transacting  business  in 
such  a  way  or  manner  as  to  lead  the  public  to  believe  that  its 
business  is  that  of  a  bank,  savings  bank  or  trust  company  dur- 
ing the  pendency  of  such  action  and  for  all  time  and  may  make 
such  other  order  or  decree  as  equity  and  justice  may  require. 

Sec.  12a.     Every  person,  firm,  company,  copartnership  or  Proper  capital  stock 
corporation,  domestic  or  foreign,  advertising  that  he  or  it  Is  must  be  paid  in  before 

.    .  .  .  ,    .         .  banking  business  is 

receiving  or  accepting  money  or  savings,  and  issuing  notes  or  permitted 
certificates  of  deposit  therefor,  or  advertising  that  he  or  it  is 
transacting  the  business  of  a  bank,  savings  bank  or  trust  com- 
pany, or  making  use  of  any  office  sign  at  the  place  where  such 
business  is  transacted,  having  thereon  any  artificial  or  cor- 
porate name,  or  other  words  indicating  that  such  place 
or  office  is  the  place  or  office  of  a  bank,  or  trust 
company,  or  that  deposits  are  received  there  or  pay- 
ments made  on  check,  or  that  interest  is  paid  on 
deposits,  or  that  certificates  of  deposit,  either  with  or 
without  interest  are  being  issued,  or  that  any  other  form  of 
banking  business  is  transacted,  and  every  person,  firm,  com- 
pany, copartnership  or  corporation,  domestic  or  foreign,  mak- 


12  CALIFOBNIA  BANK  ACT 

ing  use  of  or  circulating  any  letterheads,  billheads,  blank  notes, 
blank  receipts,  certificates    or    circulars,    or    any    written  or 
printed,  or  partly  written  and  partly  printed,  paper,  whatever, 
having  thereon  any  artificial  or  corporate  name,   or  adver- 
tising that  such  business  is  the  business  of  a  bank,  savings 
bank  or  trust  company,  must  have  the  proper  capital  stock 
Certificate  must  be  paid  in  and  set  aside  for  the  purpose  of  transacting  such  busi- 
^^'^busSess"^may^°be  "^^s,  and  must  havc  received  from  the  superintendent  of  banks, 
transacted  as  providcd  for  in  this  act,  a  certificate  to  do  a  banking  busi- 
ness.    Any  person,  firm,  company,  copartnership  or  corpora- 
tion, domestic  or  foreign,  violating  any  provision  of  this  sec- 
Penaity  tion  shall  forfeit  to  the  state  one  hundred  dollars  a  day  for 
every  day  or  part  thereof  during  which  such  violation  con- 
injunction  issuable  tinues.    Upou  action  brought  by  the  superintendent  of  banks 

aaainst violations. etc.   .1  .  •  •    •  .•  .      •    •  1 

the  court  may  issue  an  mj  unction  restraining  any  such  person, 
firm,  company,  copartnership  or  corporation  from  further  vio- 
lating any  provision  of  this  section,  and  may  make  such  further 
order     or     decree     as     equity     and     justice     may     require. 
Business  herein  Evcry    pcrsou,    firm,    compauy,    copartnership    or    corpora- 
transarted  according  tion  doiug  any  of  the  things  or  transacting  any  of  the  business 
to  this  Act.   defined  in  this  section,  must  transact  such  business  according 
to  the  provisions  of  the  bank  act,  and  the  superintendent  of 
Books  examinable  banks  or  his  deputy  or  examiners  shall  have  authority  to  ex- 
or  vioations  ^^^^  |.j^g  accouuts,  books  and  papers  of  every  such  person, 
firm,  company,  copartnership  or  corporation,  domestic  or  for- 
eign, in  order  to  ascertain  whether  such  person,  firm,  company, 
This  section  not  Copartnership  or  corporation  has  violated  or  is  violating  any 
applicable  to  name  provisious  of  this  scction ;  provided,  that  this  section  shall  not 
of  b"^<^^°^8^^^^d^J^^^^^  ^ppjy  ^Q  ^jjg  corporate  name  of  any  building  and  loan  associa- 
tion now  or  heretofore  doing  business  in  this  state;  and  pro- 
Any  such  association  vided,  further,  that  any  such  association  having  in  its  corporate 
shall  on  signs  and  name  words  not  clearly  indicatinsf  the  nature  of  its  business 

printed  matter  indi-  -^  ° 

;   cate  it  is  a  building  shall,  on  all  sigus,  letterheads  and  advertising  matter,  state : 

and  loan  association  uj^^^  jg  ^  buildiug  and  loau  associatiou"  or  words  to  that 

eflFect;  and  provided,  further,  that  any  building  and  loan  asso- 

Powers  of  such      .      .  -  .  •  .  ^  .•«'       . 

association  ciatiou  may  borrow  money,  issue  investment  certificates  or 
evidences  of  indebtedness,  stating  the  rate  of  interest  and  terms 
and  conditions  of  repayment,  and  do  such  other  business  as 
may  be  authorized  by  the  laws  of  the  state  relating  to  building 


GENEEAIi   PEO VISIONS  13 

and  loan  associations ;  and  provided,  further,  that  no  such  asso-  No  b.  &  l.  ass'i 

0  hold  itself  ou 
savings  bank 


ciation  shall  advertise  or  hold  itself  out  to  the  public  as  a  savings  f  ^""^^  '^^^  °''*  ^* 


bank. 

Sec.  12b.    Nothing  in  this  act  shall  be  construed  or  held  Use  of  word  "trust" 
to  apply  to  any  corporation  organized  under  the  laws  of  any  Life*insurl^ce^° 
other  state  which  is  authorized  by  its  charter  or  articles  corporation 
of  incorporation  to  transact  the  business  of  life  insurance 
and  also  to  be  known  as  and  to  transact  business  as  a  trust 
company  and  which  shall  have  complied  with  the  laws  of 
this  state  affecting  the  transaction  in  this  state  of  the  busi- 
ness of  life  insurance  by  a  foreign  corporation  and  which 
shall  have  heretofore  engaged  in  such  business  of  life  in- 
surance in  this  state,  in  such  manner  as  to  forbid  or  prevent 
its  making  use  of  its  corporate  title  in  its  life  insurance 
business  in  this  state  in  any  such  way  and  to  any  such 
extent  as  it  might  have  made  use  of  the  same  if  this  act 
had  not  been  passed. 

Sec.  12c.     Any  corporation  organized  under  the  laws  of  Foreign  corporation, 
any  country  or  state  other  than  this  state  which  has  complied  "o*  transacting  bank- 

. \       11       r    1       ^  r     1  •  .    .  mg,  may  lend  money 

with  all  of  the  laws  of  this  state  pertaining  to  foreign  corpora- 
tions and  is  not  engaged  in  the  business  of  banking  or  receiv- 
ing money  on  deposit  in  this  state  may  lend  money  in  this  state 
and,  for  that  purpose,  may  maintain  offices  in  this  state,  and 
sue  and  be  sued  in  this  state  under  its  proper  corporate  name, 
notwithstanding  any  prohibitions  contained  in  this  act  as  to 
the  use  of  any  words  in  the  name,  signs  or  advertising  matter 
of  corporations  not  under  the  supervision  of  the  superintendent 
of  banks. 

(Sec.  13.     Repealed  1913.) 

Sec.   14.     No  bank,  or  officer  thereof,  shall  advertise  in  Advertisement  of 
any  manner,  or  publish  any  statement  of  the  capital  author-  ^^^^^^^ 
ized  or  subscribed,  unless  it  or  he  advertise  and  publish  in 
connection  therewith,  the  amount  of  capital  actually  paid 
up.    No  bank  shall  publish  a  statement  of  its  resources  or  joint  advertising 
liabilities  in  connection  with  those  of  any  other  bank,  unless  condition  of 
such  statement  shall  show  the  resources  and  liabilities  of  ^^°^^°^^ 
each  bank  separately;  nor  shall    surplus    and    undivided 
profits  be  advertised  as  an  aggregate. 


14  CALIFOBNIA  BANK  ACT 

Unclaimed  deposits  Sec.  15.  All  amounts  of  moncy  heretofore  or  hereafter 
^^^^tef  20yetls  deposited  with  any  bank  to  the  credit  of  depositors  who  have 
not  made  a  deposit  on  said  account  or  withdrawn  any  part  there- 
of or  the  interest,  and  which  shall  have  remained  unclaimed  for 
more  than  twenty  years  after  the  date  of  such  deposit,  or  with- 
drawal of  any  part  of  principal  or  interest,  and  for  which  no 
claimant  is  known  or  the  depositor  cannot  be  found,  shall, 
with  the  increase  and  proceeds  thereof,  be  deposited  with  the 
state  treasurer  in  the  same  manner  and  subject  to  the  same 
distribution  as  provided  for  in  section  one  thousand  two  hun- 
dred thirty-four  of  the  Code  of  Civil  Procedure.    The  presi- 

Annuai  statement  (jg^t  or  managing*  officer  of  every  bank  must,  within  fifteen 

to  Supt.  and  to  state  o     cs  J  > 

Controller  concern-  days  after  the  first  day  of  January  of  every  year,  return  to  the 
ins  unclaimed  superintendent  of  banks  a  sworn  statement  showing  the  names 
of  depositors  known  to  be  dead,  or  who  have  not  made  further 
deposits,  or  withdrawn  any  moneys  during  the  preceding 
twenty  years  and  at  the  same  time  it  shall  be  the  duty  of  the 
president  or  managing  officer  of  every  bank  to  furnish  to  the 
state  controller  a  list  of  the  names  of  all  depositors  to  whom 
said  moneys  belong  or  to  whom  said  bank  owes  the  same. 
Above  statements  s^ch  Statement  shall  show  in  detail  the  following:  matters,  viz : 

shall  include  .  °  ' 

First — The  name  and  last  known  place  of  residence  or 
postoffice  address  of  the  person  making  such  deposit; 

Second — The  amount  and  date  of  such  deposit  and  whether 
the  same  are  in  moneys  or  securities,  and  if  the  latter,  the 
nature  of  the  same; 

Third — The  interest  due  on  such  deposit,  if  any,  and  the 
amount  thereof ; 

Fourth — ^The  sum  total  of  such  deposit,  together  with  the 
interest  added  thereto  due  from  such  bank  on  account  of  such 
deposit  or  deposits  and  interest  thereon  to  such  depositor,  but 
Exception  as  to  nothing  contained  herein  shall  require  any  corporation  or  per- 
son renting  lock  boxes  or  safes  in  vaults  for  storage  purposes 
to  open  or  report  concerning  property  stored  therein.  Such 
report  itemized  as  aforesaid  shall  be  signed  by  the  person  mak- 
ing the  same  and  shall  be  sworn  to  before  a  person  competent 
to  administer  oaths  as  a  full,  complete  and  truthful  statement 
of  each  of  the  items  therein  contained.    The  president  or  man- 


GENERAL    PRO  VISIONS  15 

aging  officer  of  every  bank  must,  within  fifteen  days  after  the  Biennial  statement 
first  day  of  January  of  every  odd  numbered  year,  return  to  Iccounts  dTraS^ 
the  superintendent  of  banks  a  sworn  statement  showing  the  lo  years 
names  of  depositors  known  to  be  dead,  or  who  have  not  made 
further  deposits,  or  withdrawn  any  moneys  during  the  pre- 
ceding ten  years.     Such  statements  shall  show  the  amount  of  statement  shau  show 
the  account,  the  depositor's  last  known  place  of  residence  or 
post  office  address,  and  the  fact  of  death,  if  known  to  such 
president  or  managing  officer.     Such  president  or  managing  Publication  of 
officer  must  give  notice  of  these  deposits  in  one  or  more  news-  ^^^  ^°^^°* 
papers  published  in  or  nearest  to  the  town  or  city  where  such 
bank  has  its  principal  place  of  business,  at  least  once  a  week 
for  four  consecutive  weeks,  the  cost  of  such  publication  to  be 
paid  pro  rata  out  of  such  unclaimed  deposits.     This  section  Smaii  deposits 
does  not  apply  to  any  deposit  made  by  or  in  the  name  of  a  ®*^®p*®^ 
person  known  to  the  president  or  managing  officer  to  be  living,  Penalties 
or  which,  with  the  accumulation  thereon,  is  less  than  fifty 
dollars.    The  superintendent  of  banks  must  incorporate  in  his 
subsequent  report  such  returns  made  to  him  as  provided  in 
this   section.     If  any  president  or  managing  officer  of  any  Fixing  date  of  receipt 
bank    nee^lects    or    refuses    to    make    the    sworn    statement  of  deposit  transferred 

^  from  another  bank 

required    by    this    section,    such    bank    shall    forfeit    to    the  under  Sec  31  or  3ia 
State    of    California    the    sum    of    one    hundred    dollars    a 
day  for  each  day  such  default  shall  continue.      Any  presi- 
dent or  managing  officer  of  any  bank  who  violates  any  of  the 
provisions  of  this  section  shall  forfeit  to  the  State  of  California 
the  sum  of  one  hundred  dollars  a  day  for  each  and  every  day 
such  violation  shall  continue.    For  the  purposes  of  this  section 
all  deposits  received  by  any  bank  under  the  provisions  of 
section  thirty-one  or  section  thirty-one  a  of  this  act  shall  be 
deemed  to  have  been  deposited  with  such  bank  at  the  time  the 
deposit  was  made  with  the  bank  from  which  the  deposit  was 
transferred ;  provided,  that  any  bank  which  shall  make  any  de-  Bank  making  deposit 
posit  with  the  State  Treasurer  in  conformity  with  the  provisions  ^Jer  tWs  slction^' 
of  this  section  shall  not  thereafter  be  liable  to  any  person  for  the  not  thereafter  liable 
same  and  any  action  which  may  be  brought  by  any  person 
against  any  bank  for  moneys  so  deposited  with  the  State  Treas- 
urer shall  be  defended  by  the  Attorney  General  without  cost 
to  such  bank. 


16  OALIFOBNIA  BANS  ACT 

Deposit  for  married        Sec.  16.     When  any  deposit  with  a  bank  shall  be  made 

woman  or  minor  to    ,  .        ,  .  .  , 

be  held  for  exclusive  ^Y  OT  in  the  name  Of  any  married  woman  or  minor,  the  same 
benefit,  etc.  ghall  be  held  for  the  exclusive  right  and  benefit  of  such  depos- 
itor, and  free  from  the  control  or  lien  of  all  other  persons,  ex- 
cept creditors,  and  shall  be  paid,  together  with  the  dividends,  if 
any,  and  interest,  if  any,  thereon  to  the  person  in  whose  name 
deposits  shall  have  been  made,  and  the  receipt  or  acquittance 
of  such  minor  shall  be  a  valid  and  sufficient  release  and  dis- 
charge for  such  deposit,  or  any  part  thereof,  to  the  bank. 
Trust  deposit  When  any  deposit  with  a  bank  shall  be  made  by  any  person  in 
trust  for  another,  and  no  other  or  further  notice  of  the  exist- 
ence and  terms  of  a  legal  and  valid  trust  shall  have  been  given 
in  writing  to  such  bank,  in  the  event  of  the  death  of  the 
trustee,  the  same  or  any  part  thereof,  together  with  the  divi- 
dends or  interest,  if  any,  thereon,  may  be  paid  to  the  person 
for  whom  the  deposit  was  made.  When  a  deposit  with  a  bank 
Joint  account  shall  be  made  by  any  person  in  the  names  of  such  depositor 

provisions  ^  .  ,   .       .  , 

and  another  person  or  persons,  and  in  form  to  be  paid  to  either 
or  the  survivor  or  survivors  of  them,  such  deposit  thereupon 
and  any  additions  thereto  made  by  either  of  such  persons  upon 
the  making  thereof,  shall  become  the  property  of  such  person 
as  joint  tenants,  and  the  same,  together  with  all  interest 
thereon,  shall  be  held  for  the  exclusive  use  of  the  persons  so 
named,  and  may  be  paid  to  either  during  the  lifetime  of  all 
or  any  or  to  the  survivor  or  survivors  after  the  death  of  one 
or  more  of  them,  and  such  payments  and  the  receipt  or  acquit- 
tance of  the  one  to  whom  such  payment  is  made  shall  be  valid 
and  sufficient  release  and  discharge  to  said  bank  for  all  pay- 
ments made  on  account  of  such  deposit. 
Accounts  of  less  than  The  surviviug  husbaud  or  wife  or  the  guardian  of  the  estate 
*^^d'b7next''of  kin  ^^  ^^y  i^sanc  or  incompetent  husband  or  wife  of  any  deceased 
without  adminis-  person,  or,  if  no  husband  or  wife  is  living,  then  the  children 
tration  ^^  ^j^^  guardian  of  the  estates  of  any  minor  or  insane  or  in- 
competent children  of  said  decedent,  or,  if  no  children  are 
living,  then  the  father  or  mother  or  guardian  of  the  estate 
of  any  insane  or  incompetent  father  or  mother  of  such  decedent, 
and  if  neither  the  father  or  mother  is  living,  then  the  brothers 
and  sisters  or  the  guardian  of  the  estates  of  any  minor  or  insane 


GENERAL    PROVISIONS  17 

or  incompetent  brothers  and  sisters  of  such  decedent,  may, 
without  procuring  letters  of  administration,  collect  of  any  bank 
any  sum  which  said  deceased  may  have  left  on  deposit  in  such 
bank  at  the  time  of  his  or  her  death;  provided,  such  deposit 
shall  not  exceed  the  sum  of  five  hundred  dollars.  Any  bank,  Bank  to  receive 
upon  receiving  an  affidavit  stating  that  said  depositor  is  dead,  ^^^^^^^  °®^ 
and  that  affiant  is  the  surviving  husband  or  wife  or  the  guar-  deposit 
dian  of  the  estate  of  an  insane  or  incompetent  surviving  hus- 
band or  wife,  as  the  case  may  be,  of  said  decedent,  or  stating 
that  decedent  left  no  husband  or  wife,  and  that  affiant  is,  or 
affiants  are,  the  children,  or  the  guardians  of  the  estates  of  the 
minor,  insane  or  incompetent  children,  as  the  case  may  be, 
of  said  decedent,  or  stating  that  decedent  left  neither  husband, 
wife  nor  children,  and  that  affiant  is  the  father  or  mother,  or 
the  guardian  of  the  estate  of  the  insane  or  incompetent  father 
or  mother,  as  the  case  may  be,  of  said  decedent,  or  stating 
that  the  decedent  left  neither  husband,  wife,  children,  father 
nor  mother,  and  that  affiants  are  the  brothers  and  sisters  or 
the  guardians  of  the  estates  of  the  minor,  insane  or  incom- 
petent brothers  and  sisters,  as  the  case  may  be,  of  said  dece- 
dent, and  that  the  whole  amount  that  decedent  left  on  deposit 
in  any  and  all  banks  of  deposit  of  this  state,  does  not  exceed 
the  sum  of  five  hundred  dollars,  may  pay  to  said  affiant  or 
affiants,  any  deposit  of  said  decedent,  if  the  same  does  not 
exceed  the  sum  of  five  hundred  dollars,  and  the  receipt  of 
such  affiant  is  sufficient  acquittance  therefor;  provided,  how-  Guardian's  affidavit 
ever,  that  whenever  the  affidavit  herein  mentioned  is  made 
by  any  guardian  it  shall  be  accompanied  by  a  certified  copy 
of  the  letters  of  guardianship  issued  to  such  guardian  attached 
to  a  certificate  of  the  clerk  of  the  court  having  appointed  such 
guardian  to  the  effect  that  the  said  letters  of  guardianship 
have  not  been  revoked. 

Sec.  17.    Every  bank  now  in  existence  or  hereafter  organ-  Banks  shall  keep 
ized  shall  keep  in  its  offices,  in  a  place  accessible  to  the  stock-  f  ^cessibie  to  stock. 

holders,  depositors 

holders,  depositors,  and  creditors  thereof,  and  for  their  use,  a  and  creditors  a  list  of 
book  containing  a  list  of  stockholders  in  such  corporation,  and  th°*ir  hoidir  T*^ 
the  number  of  shares  of  stock  held  by  each;  and  every  such 
bank  shall  keep  posted  in  its  office,  in  a  conspicuous  place, 


X3  CALIFOBNIA  BANE  ACT 

Bank  shall  post  in  acccssible  to  the  pubHc  generally,  a  notice  signed  by  the  presi- 
tot:urr.S"l  dent  or  secretary,  showing: 
directors  and  their        j^   The  names  of  the  directors  of  such  bank. 

2.  The  number  and  the  par  value  of  the  shares  of  stock 
held  by  each  director. 

The  entries  on  such  book  and  such  notice  shall  be  made  and 
Time  for  making  postcd  withiu  twcnty-four  hours  after  any  transfer  of  stock, 
changes  in  list^^d  ^^^  gj^^jj  ^^  prima  focic  evidence  against  each  director  and 
stockholder  of  the  number  of  shares  of  stock  held  by  each. 
(Sec.  18.     Repealed  1913.) 
Percentage  of        Sec.  19.     The  aggregate  of  paid-up  capital  together  with 
capitd^and^surpius  ^j^^  surplus,  of  cvcry  commercial  bank,  must  equal  ten  per 
commercial  banks  ccutum  of  its  dcposit  liabilities ;  such  deposit  liabilities  shall  not 
be  increased  when  such  proportion  of  paid-up  capital  and  sur- 
plus is  wanting,  and  in  no  event  shall  said  paid-up  capital  be 
less  than  the  minimum  paid-up  capital  provided  by  this  act; 
Graduated  scale  for  provided,  however,  that  the  aggregate  of  paid-up  capital  and 
savings  a    s  g^j-pj^g  q£  cvcry  savings  bank  having  a  capital  stock,  and 
the  reserve  fund  of  every  savings  bank  without  a  capital 
stock,  must  equal  the  following  percentages  of  its  deposit 
liabilities : 

(a)  Ten  per  centum  of  any  amount  up  to  and  including 
two  million  dollars. 

{h)  Seven  and  one-half  per  centum  of  any  amount  in  ex- 
cess of  two  million  dollars  up  to  and  including  five  million 
dollars. 

{c)  Five  per  centum  of  any  amount  in  excess  of  five  mil- 
lion dollars  up  to  and  including  fifteen  million  dollars. 

{d)  Two  and  one-half  per  centum  of  any  amount  in  ex- 
cess of  fifteen  million  dollars  up  to  and  including  forty  million 
dollars. 

{e)  One  per  centum  of  any  amount  in  excess  of  forty  mil- 
lion dollars. 

The  deposits  shall  not  be  increased  if  such  proportion  of 
paid-up  capital  and  surplus  or  reserve  fund  to  deposit  lia- 
bilities is  not  maintained. 

Sec.  20.  Every  commercial  bank  receiving  deposits  as 
a  depositary  bank  of  other  banks  shall  have  at  all  times  as 


GENEEAL    PEO VISIONS  19 

its  lawful  money  reserve  an  amount  equal  to  twenty  per  Commercial  bank 
centum  of  the  aggregate  amount  of  its  deposits.     Two-  ""^^"^^^ 
fifths  of  such  reserve  shall  be  in  its  own  keeping  in  lawful  Reserve  requirements 
money  of  the  United  States,  or  gold  certificates  or  silver  certifi-  °^  ^^^p^^^^  ^^^ 
cates  of  the  United  States.     The  remaining  three-fifths  thereof 
may    consist    of    moneys    on    deposit    subject    to  call    with 
any    bank    or    banks    in    this    state    other    than    a    savings 
bank;  or  one  half  of  such  three  fifths  or  any  less  portion 
thereof  may  consist  of  moneys  on  deposit  subject  to  call 
with  any  bank  or  banks  in  the  cities  of  New  York,  Chicago 
or  St.  Louis,  other  than  a  savings  bank,  and  the  balance  of 
such  three  fifths,  of  moneys  on  deposit  subject  to  call  with 
any  bank  or  banks  in  this  state  other  than  a  savings  bank. 
Every  commercial  bank  not  receiving  deposits  as  a  deposi-  Reserve  requirements 
tary  bank  of  other  banks  shall  have  at  all  times  as  its  lawful  nit  r^^^de^ts 
money  reserve,  an  amount  equal  to  fifteen  per  centum  of  of  oti^er  banks 
the  aggregate  amount  of  its  deposits.     Two  fifths  of  such 
reserve  shall  be  in  its  own  keeping  in  lawful  money  of  the 
United  States,  or  gold  certificates  or  silver  certificates  of  the 
United  States.    The  remaining  three-fifths  thereof  may  consist 
of  moneys  on  deposit  subject  to  call  with  any  bank  or  banks 
in    this    state    other    than    a    savings    bank;    or,    one    half 
of  such  three  fifths  or  any  less  portion  thereof  may  consist 
of  moneys  on  deposit  subject  to  call  with  any  bank  or  banks 
in  the  cities  of  New  York,  Chicago  or  St.  Louis,  other  than 
a  savings  bank,  and  the  balance  of  such  three  fifths,  of 
moneys  on  deposit  subject  to  call  with  any  bank  or  banks 
in  this  state  other  than  a  savings  bank.    If  the  lawful  money 
reserve  of  any  bank  shall  be  less  than  the  amount  required 
by  this  section,  such  bank  shall  not  increase  its  liabilities 
by  making  any  new  loans  or  discounts,  otherwise  than  by 
discounting  bills  of  exchange  on  sight,  or  by  paying  any  divi- 
dends from  profits  until  the  full  amount  of  its  lawful  money 
reserve    has    been    restored.       The    superintendent    of   banks  Bank  faUing  to  make 
may  notify  any  bank  whose  lawful  money  reserve  shall  be  ^h°etiteqldredbr^* 
below  the  amount  herein  required,  to  restore  such  reserve;  Superintendent 
and,    if    it    shall    fail    for    thirty    days    thereafter    to    re-  ^e^ed  Wven't 
store  such  lawful  money  reserve,  such  bank  shall  be  deemed 
insolvent  and  may  be  proceeded   against  under  the  pro- 


20  OALIFOENIA  BANK  ACT 

visions  of  this  act;  provided,  that  all  deposits  of  money  herein 
permitted  or  required  shall  comply  with  the  provisions  of 
section  forty-three  of  this  act. 
Dividends  when  and         q,^q^   21.     The    directors   of   any   bank   having   a   capital 

how  declared  .         .  i    •  i  -        i 

stock  may,  at  certam  times,  and  in  such  manner  as  its  by- 
laws prescribe,  declare  and  pay  dividends  to  depositors  and 
stockholders  of  so  much  of  the  profits  of  the  bank,  and  of 
the  interest  arising  from  the  capital,  surplus    and    deposits, 
as  may  be  appropriated  for  that  purpose  under  its  by-laws 
Portion  of  profits  to  or  uudcr  its  agreements  with  depositors,  but  every  such 
ecame    o  surp  us  ^^^■^  shall,   before   the   declaration  of  any  such   dividend, 
carry  at  least  one  tenth  part  of  the  net  profits  of  the  stock- 
holders for  the  preceding  half  year,  or  for  such  period  as  is 
covered  by  the  dividend,  to  its  surplus,  until  such  surplus 
shall  amount  to  twenty-five  per  centum  of  its  paid  up  capital 
Surplus  convertible  stock.     The  wholc  or  any  part  of  such  surplus,  if  held  as 
into  paid  in  capital  ^]^g  exclusivc  property  of  the  stockholders,  may  at  any  time 
be    converted    into    paid    in    capital,    in    which    event    such 
surplus    shall    be    restored    in    the    manner    above    provided 
until  it  amounts  to  twenty-five  per  centum  of  the  aggregate 
Losses  in  excess  of  paid  Up  Capital  stock.    Subjcct  to  the  provisions  of  section 
chargeSlfto^u'r^ius'.  ^i^eteen  of  this  act,  any  losses  sustained  by  any  such  bank 
except  portion  of  in  cxccss  of  its  Undivided  profits  may  be  charged  to  and  paid 
^pre^serStuteT,  ^^^^  ^^^  surplus,  in  which  event  such  surplus  shall  be  restored 
etc.  in  the  manner  above  provided,  to  the  amount  required  by  law ; 
provided,  however,  that  any  bank  which  has  invested  any  por- 
tion of  its  surplus  in  its  bank  premises,  furniture  and  fixtures, 
vaults,  or  safe  deposit  vaults,  and  boxes  necessary  or  proper 
No  maximum  limita-  to  Carry  On  its  banking  business  shall  not  be  permitted  to 
tion  to  surplus  charge  any  loss  to  that  portion  of  its  surplus  so  invested.   A 
larger  surplus  may  be  created  and  nothing  herein  contained 
Capital  and  assets  shall  be  coustrucd  as  prohibitory  thereof.  The  capital  and  assets 
^^a^TtockhoMrr^n  °^  ^^^  ^^^^  h^Luk  are  a  security  to  depositors  and  stockholders, 
order  named  dcpositors  having  the  priority  of  security  over  stockholders. 

Preference  by  piedg-        ^^^'  ^^^-     '^^  bank,   banker,   or  bank  officer,   shall   give 
ing  assets  forbidden,  preference  to  any  depositor  or  creditor  by  pledging  the  assets 
authorised  ^^  ^^^  bank  as  collateral  security,  except  as  otherwise  author- 
provided  that,  ized  by  law;  provided  that  any  commercial  bank,  or  commer- 


GENERAL    PROVISIONS  21 

cial  department  of  a  departmental  bank,  may  borrow  money  commercial 

for  temporary  purposes,  and  may  pledge  assets  of  said  com-  L^s'J^s'^defcertain 

mercial  bank,  or  commercial  department  of  said  departmental  conditions 

bank,  not  exceeding  fifty  per  centum  in  excess  of  the  amount 

borrowed,  as  collateral  security  therefor;  provided,  that  any  Restriction  as  to 

public  moneys,  or  postal  savings  moneys,  deposited  with  any  postal  S^ngs^  °' 

such  bank  under  any  provision  of  law,  shall  not  be  construed 

as  "borrowed  money"  within  the  meaning  of  this  section.    No  No  bank  to  borrow 

bank  shall  at  any  time,  without  permission  of  the  superintend-  capuarand  st^i^ 

ent  of  banks,  borrow  an  amount  exceeding  the  amount  of  its  ^t^out  permission 

paid-up  capital  stock  and  surplus  at  such  time  actually  paid 

in  and  remaining  undiminished  by  losses  or  otherwise.    No  Partial  payment  on 

bank  shall  make  partial  payments  upon  any  certificate  of  de-  out  permission  of 

posit.   In  no  case  shall  an  overdraft  of  more  than  ninety  days  Superintendent. 

standing  be  allowed  as  an  asset  of  any  bank.    Any  debt  due  overdraft  as  asset 

to  any  commercial  bank,  on  which  interest  is  past  due  and  When  debt  deemed 

unpaid  for  the  period  of  one  year,  unless  the  same  is  well   ^^^  to  be  charged  off 

secured,  and  is  in  process  of  collection,  shall  be  considered  a 

bad  debt  and  shall  be  charged  off  to  the  profit  and  loss  account 

at  the  expiration  of  that  time. 

Sec.  22.  Any  corporation  authorized  by  its  articles  of  In-  Departmental  Banks 
corporation  so  to  do,  may  combine  the  business  of  a  commer- 
cial bank  and  savings  bank  and  trust  company,  or  any  one  or 
more  or  all  of  them ;  provided,  that  no  corporation  authorized  ^.®j*"j^*^°^^*° 
to  transact  a  trust  business  and  which  is  also  organized  to  en- 
gage in  the  business  of  title  insurance,  shall  engage  in  or  com- 
bine the  business  of  a  commercial  bank  or  savings  bank. 

Sec.  23.     When  a  bank  desires  to  do  a  departmental  busi-  Prerequisites  to  estab- 
ness,  it  shall  first  obtain  the  consent  of  the  superintendent  of  ^^^^ing  departments 
banks,  and  in  its  application  therefor,  file  a  statement  making 
a  segregation  of  its  capital  and  surplus  for  each  department. 
Such  capital  and  surplus,  when  so  apportioned  and  approved  Apportionment  and 
by  the  superintendent  of  banks,  shall  be  considered  and  treated  anTs^TiTs^*  ^^^^*^ 
as  the  separate  capital  and  surplus  of  such  department  as  if 
each  department  was  a  separate  bank.  Thereafter  a  bank  may, 
from  time  to  time,  with  the  previous  consent  and  approval  of 
the  superintendent  of  banks  and  subject  to  the  provisions  of 
section  nineteen  of  this  act,  change  any  segregation  and  ap- 


22  CALIFOBNIA  BANK  ACT 

Departmental  Banks  portionment  of  capital  and  surplus  previously  made  and  make 

—con  inue    ^  ^^^  segregation  and  apportionment  of  its  capital  and  surplus. 

Paid  up  capital  stock  Every  bank  hereafter  organized  doing  a  departmental  business 

requirements    ^^^^^  ^^^^  ^^.^  ^^^   .^  ^^^j^^  Capital  StOck  aS  f OUOWS  : 

Where  population  (o)  In  any  locality  in  which  the  population  does  not  exceed 
not  over  5,000  ^^^  thousaud  pcrsons,  not  less  than  twenty-five  thousand  dol- 
lars if  it  transacts  both  a  commercial  and  savings  business,  or 
not  less  than  one  hundred  twenty-five  thousand  dollars,  if 
it  transacts  both  a  commercial  and  trust  business,  or  not  less 
than  one  hundred  twenty-five  thousand  dollars  if  it  trans- 
acts both  a  savings  and  trust  business  and  not  less  than  one 
hundred  twenty-five  thousand  dollars  if  it  transacts  a  com- 
mercial, savings  and  trust  business. 

Where  population  (b)  In  any  city  in  which  the  population  is  more  than 
5,000  to  25.000  ^^g  thousand  persons,  but  does  not  exceed  twenty-five 
thousand  persons,  not  less  than  fifty  thousand  dollars  if  it 
transacts  both  a  commercial  and  savings  business,  or  not  less 
than  one  hundred  fifty  thousand  dollars  if  it  transacts  both  a 
commercial  and  trust  business,  or  not  less  than  one  hundred 
fifty  thousand  dollars  if  it  transacts  both  a  savings  and  trust 
business,  and  not  less  than  one  hundred  fifty  thousand  dollars 
if  it  transacts  a  commercial,  savings  and  trust  business. 

Where  population  (c)  In  any  city  in  which  the  population  is  more  than  twen- 
ty-five thousand  persons  but  does  not  exceed  one  hundred 
thousand  persons,  not  less  than  one  hundred  thousand  dollars, 
if  it  transacts  both  a  commercial  and  savings  business,  or  not 
less  than  two  hundred  thousand  dollars  if  it  transacts  both  a 
commercial  and  trust  business,  or  not  less  than  two  hundred 
thousand  dollars  if  it  transacts  both  a  savings  and  trust  busi- 
ness, and  not  less  than  two  hundred  thousand  dollars  if  it 
transacts  a  commercial,  savings  and  trust  business. 

Where  population         (d)  In  any  city  in  which  the  population  is  more  than  one 

100,000  to  200,000    ,-,,  -  ,,  .  ijj 

hundred  thousand  persons  but  does  not  exceed  two  hundred 
thousand  persons,  not  less  than  two  hundred  thousand  dollars, 
if  it  transacts  both  a  commercial  and  savings  business,  or  not 
less  than  four  hundred  thousand  dollars  if  it  transacts  both  a 
commercial  and  trust  business,  or  not  less  than  four  hundred 
thousand  dollars  if  it  transacts  both  a  savings  and  trust  busi- 


GENERAL    PBO VISIONS  23 

ness,  and  not  less  than  four  hundred  thousand  dollars  if  it  Departmental  banks 

.   ,  .  ,        ^  -t       -  — continued 

transacts  a  commercial,  savmgs  and  trust  busmess. 

(e)  In  any  city  in  which  the  population  exceeds  two  hun-  when  population 
dred  thousand  persons,  not  less  than  three  hundred  thousand  exceeds  200.000 
dollars  if  it  transacts  both  a  commercial  and  savings  business, 
or  not  less  than  five  hundred  thousand  dollars  if  it  transacts 
both  a  commercial  and  trust  business,  or  not  less  than  five  hun- 
dred thousand  dollars  if  it  transacts  both  a  savings  and  trust 
business,  and  not  less  than  five  hundred  thousand  dollars  if  it 
transacts  a  commercial,  savings  and  trust  business. 

The  foregoing  classification  shall  not  apply  to  any  bank  al-  classification 
ready  in  existence  which  has  received  from  the  superintendent  ex fstl^g^bTS:!  or  to 
of  banks  a  certificate  to  do  a  banking  business;  nor  to  any  bank  included  by 
bank  the  location  of  which  shall  have  been  included  by  an-  ^ty^^ 
nexation  or  consolidation  within  the  limits  of  a  city  of  a 
class  requiring  a  larger  capitalization,  but  no  bank  thus  ex-  Restrictions  as  to 
cepted  shall  be  permitted  to  establish  any  new  branch  office  as  excepted  banks 
provided  in  section  nine  of  this  act  or  to  remove  its  place  of 
business    from    the    original    limits    of    the    city    or    town- 
ship  wherein   it   was   located   prior   to   such   annexation   or 
consolidation  until  it  shall  have  the  capital  required  of  banks 
in  such  city  not  within  said  exception.     Such  excepted  banks 
may  not  in  any  case  decrease  their  capital  stock  but  may  in- 
crease the  same  in  the  manner  provided  by  law  to  an  amount 
either  greater  or  less  than  that  required  of  banks  in  such  city 
not  within  said  exception.    The  capital  stock  referred  to  herein  capital  of  such  banks 
shall  be  increased  from  time  to  time  and  to  the  same  extent  as  ^y-^^^"^^  ^°  provisions 

Sec.  19 

provided  for  in  section  nineteen  of  this  act. 

For  the  purposes  of  this  act,  the  population  shown  and  de-  Population— 
termined  by  the  last  preceding  federal  census,  or  any  subse-  ^^^^  determined 
quent  census  compiled  and  certified  under  any  law  of  this  state, 
shall  be  deemed  to  be  the  population  of  any  city  in  which  any 
such  bank  is  to  be  organized.  If  the  principal  place  of  business 
of  any  bank  so  organized  is  located  outside  of  the  corporate 
limits  of  any  city,  then  the  population  of  that  portion  of  the 
judicial  township  in  which  said  bank  is  to  have  its  principal 
place  of  business,  which  is  not  included  within  the  boundaries 
of  any  municipal  corporation,  as  such  population  is  shown  and 


24  CALIFOBNIA  BANE  ACT 

Departmental  Banks  determined  by  such  federal  or  subsequent  official  census,  shall 

be  the  basis  for  classification  under  the  provisions  of  this  act. 

ShaU  obtain  certifi-        Sec.  24.     Evcry  bank,  before  it  commences  to  do  busi- 

cate  of  Supt.  for  each  ,      r  • ,  i  ,  ,  i 

department  HCSS  or  bcforc  it  opcns  a  ncw  department  and  commences 
to  transact  business  in  or  under  such  new  department,  shall 
obtain  the  certificate  of  the  superintendent  of  banks  for  the 
Prerequisites  to  Opening  of  each  of  the  departments  specified.  Each  certifi- 
certificate  ^^^^  herein  provided  for  shall  be  given  when  the  superin- 
tendent shall,  by  the  examination  required  by  this  act,  have 
satisfied  himself  that  the  proper  amount  of  cash  has  been 
paid  in  as  capital  and  the  provisions  of  this  act  complied 
with.  The  applicant  shall  pay  for  the  certificate  for  each 
department  a  fee  of  fifty  dollars. 

Shall  maintain  sep-         Sec.  25.     Evcry  bank  shall  maintain  for  each  department 
^^^aslets^re^h  ^  l^wful  moucy  rescrvc  equal  in  amount  to  that  required 
department  by  this  act  for  the  respective  business  conducted,  and  shall 
keep  separate  and  distinct  the  lawful  money  reserve  of  any 
department  from  that  of  any  other  department;  and  all 
Deposit  by  a  dcposits  made  with  other    banks,    whether    temporary    or 
^^^othCTbaSs  otherwise,  shall  be  assets  of  the  respective  departments  by 
which  they  were  made,  and  shall  be  so  carried  on  the  books 
of  such  other  banks,  and  shall  be  repaid  only  upon  the 
order  of  the  department  to  whose  credit  they  stand.     No 
One  department  not  department  shall  rcccivc  deposits  of  any  other  department 
to  recew^ deposits  q£  ^j^^  same  corporatiou ;  except  that  a  trust  department  may 
(Note  exception)  make  dcposits  of  trust  or  any  other  funds  under  its  control 
with  the  commercial  or  savings  department  of  the  same 
Conditions  governing  corporation;  provided,  hozvever,  that  any  bank  having  depart- 
^by^onTdei)t.*to  iTients  shall  havc  the  right  to  sell  and  transfer  any  bonds, 
another  sccuntics  or  loans  from  one  department  to  another  upon 
receipt  of  the  actual  value  thereof,  if  such  bonds,  securities 
or  loans  are,  under  the  provisions  of  this  act,  a  legal  invest- 
ment for  the  department  purchasing  the  same. 

Separate  account         Sec.  26.     Every  bank  having  different  departments  shall 

department,  etc.  keep  Separate  books  of  account  for  each  department  of  its 

business,  and  shall  be  governed  as  to  all  deposits,  reserves, 

investments  and  transactions  relating  to  each  department  by 


GENERAL    PROVISIONS  25 

the  provisions  in  this  act  specifically  provided  for  the  respec-  Departmental  :Banks 
tive  kind  of  business.  -<»ntinued 

It  shall  keep  all  investments  relating  to  the  savings  depart-  Savings  dept.  invest- 
ment entirely  separate  and  apart  from  the  investments  of  its  ^parlt^  ^^  ^^^* 
other  department  or  departments. 

Every  bank  shall  conduct  the  business  of  all  its  departments  Departments  to  be 
in  one  building,  or  in  adjoining  buildings,  and  shall  keep  b^^X^  g*"  *'^^°"^°^ 
entirely  separate  and  apart  in    each    department    the    cash, 
securities  and  property  belonging  to  such  department,  and  shall  Mingling  of  cash. 
not  mingle  the  cash,  securities  and  property  of  one  department  forWdden  ^**^" 
with  that  of  another. 

Sec.  27.     All  money  and  assets  belonging  to  each  depart-  Priority  of  claims 
ment,  whether  on  hand  or  with  other  banks,  and  the  invest-  ^e^^^^t  assets  of 

'  department 

ments  made,  shall  be  held  solely  for  the  repayment  of  the  depos- 
itors and  other  claimants  of  each  such  department,  as  herein 
provided,  until  all  depositors  and  other  claimants  of  each  such 
department  shall  have  been  paid,  and  the  overplus  then  re- 
maining shall  be  applied  to  any  other  liabilities  of  such  bank. 

Sec.  28.     Every  bank  in  this  state  must,  on  all  its  win-  Signs,  advertising. 
dow  sisfns  and  in  advertising,  and  on  letterheads  and  other  ^^^•'  T.^*  ^^®*^^^ 

^  -.-.,.  class  of  business 

stationery  on  which  its  business  is  transacted,  use  the  word  transacted 
"savings"  if  it  conducts  a  savings  business,  or  the  word 
"trust"  if  it  conducts  a  trust  business,  and  the  word  "commer- 
cial" if  it  conducts  a  commercial  business. 

Sec.  29.    Every  corporation  heretofore  created  under  the  Bank  without  capita 
laws  of  this  state,  doing  a  banking  business  therein,  and  which  -njfstoTc^pLy 
has  no  capital  stock,  may  elect  to  have  a  capital  stock,  and 
may  issue  certificates  of  stock  therefor,  in  the  same  manner 
as  corporations  formed  under  the  provisions  of  part  IV,  title 
I,  chapter  I,  article  I,  of  the  Civil  Code,  relating  to  the  forma- 
tion of  corporations;  provided,  that  no  such  corporation  shall 
use  or  convert  any  moneys  or  funds  theretofore  belonging  to  it, 
or  under  its  control,  into  capital  stock;  but  such  funds  or 
moneys  must  be  held  and  managed  only  for  the  purposes  and  in 
the  manner  for  which  they  were  created.    Before  such  change  Prerequisites  to  such 
is  made,  a  majority  of  the  members  of  such  corporation  present  conversion 
at  a  meeting  called  for  the  purpose  of  considering  the  proposi-  Meeting  toibe  caUed 
tion  whether  it  is  best  to  have  a  capital  stock,  its  amount,  and 


26  CALIFOBNIA  BANE  ACT 

the  number  of  shares  into  which  it  shall  be  divided,  must  vote 

in  favor  of  having  a  capital  stock,  fix  the  amount  thereof, 

and  the  number  of  shares  into  which  it  shall  be   divided. 

Notice  of  meeting—  ^oticc  of  the  time  and  place  of  holding  such  meeting,  and 

how  given    .  ,  .  «  .  t         i  •  i  r  i 

Its  object,  must  be  given  by  the  president  of  such  corporation 
by  mailing  notice  of  such  meeting  to  each  member  of  such 
corporation  at  his  last  known  postoffice  address  at  least  ten 
days  prior  to  the  day  fixed  for  such  meeting,  and  by  publica- 
tion in  some  newspaper  printed  and  published  in  the  county, 
or  city  and  county,  in  which  the  principal  place  of  business 
of  the  corporation  is  situated,  at  least  once  a  week  for  three 

Copy  of  proceedings  succcssivc  wccks  prior  to  the  holding  of  the  meeting.  A  copy 
befiied'^'tht^'etk^  ^^  the  procccdiugs  of  this  meeting,  giving  the  number  of 

of  state  and  county  persous  prcscut,  the  votcs  taken,  the  notice  calling  the  meeting, 
the  proof  of  its  publication,  the  amount  of  capital  actually 
subscribed,  and  by  whom,  all  duly  certified  by  the  president 
and  secretary  of  the  corporation,  must  be  filed  in  the  office  of 
the  secretary  of  state  and  clerk  of  the  county  where  the 
Effect  of  proceedings  articlcs  of  incorporation  are  filed.  Thereafter  such  corporation 
is  possessed  of  all  the  rights  and  powers,  and  is  subject  to  all 
the  obligations,  restrictions,  and  limitations,  as  if  it  had  been 
originally  created  with  a  capital  stock. 

Bank  may  conduct  Sec.  30.  Any  bank  may  conduct  a  safe  deposit  department, 
department  ^ut  shall  not  iuvcst  more  than  one-tenth  of  its  capital  and 
surplus  in  such  safe  deposit  department. 

Business  of  bank  or        Sec.  31.     Any  bank  may  sell  the  whole  of  its  business  or 

of  a  department  may      -  i      i  r     i        i         •  <•  r   •         i 

be  sold  to  other  bank  the  wholc  01  the  busiucss  of  any  of  Its  departments  to  any 
other  bank  which  may  purchase  such  business  after  obtain- 
ing the  consent  of  the  stockholders  of  the  selling  and  of  the 
purchasing  banks  holding  of  record  at  least  two  thirds  of 
Method  of  making  the  issucd  Capital  stock  of  each  of  such  corporations;  such 
consent  to  be  expressed  either  in  writing  executed  and 
acknowledged  by  such  stockholders  and  attached  to  the 
instrument  of  sale,  or  to  a  copy  thereof,  or  by  vote  at  a 
stockholders'  meeting  of  each  of  such  banks  called  for  that 
purpose.  The  selling  and  purchasing  banks  must  for  such 
purposes  enter  into  an  agreement  of  sale  and  purchase, 
which  agreement  shall  contain  all  the  terms  and  conditions 


GENEBAIi   PEO VISIONS  27 

connected  with  such  sale  and  purchase.     Such  agreement  Saie  of  business 
shall  contain  proper  provision  for  the  payment  of  liabilities  ■~^"*^*""®** 
of  the  selling  bank  or  of  the  department  sold,  and  in  this  Provisions  of  agree- 
particular  shall  be  subject  to  the  approval  of  the  superin-  °^®^*°  ^  ® 
tendent  of  banks ;  and  shall  not  be  valid  until  such  approval 
is  obtained.     Such  agreement  may  contain  provisions  for 
the  transfer  of  all  deposits  to  the  purchasing  bank,  subject, 
however,  to  the  right  of  every  depositor  of  the  selling  bank 
to  withdraw  his  deposit  in  full  on  demand  after  such  trans- 
fer, irrespective  of  the  terms  under  which  it  was  deposited 
with  the  selling  bank.    The  rights  of  creditors  of  the  selling  Rights  of  creditors 
bank  shall  not  in  any  manner  be  impaired  by  any  such  sale,  of  tiuing  baic 
nor  shall  any  liability  or  obligation  for  the  payment  of  any  unimpaired  by  sale 
money  due  or  to  become  due,  or  any  claim  or  demand,  in 
any  manner,  or  for  any  cause  existing  against  such  selling 
bank  or  against  any  stockholder  thereof,  be  in  any  manner 
released  or  impaired,   and  all  the  rights,  obligations  and 
relations  of  all  the  parties,  creditors,  depositors,  trustees 
and  beneficiaries  of  trusts  shall  remain  unimpaired  by  the 
sale,  but  such  bank  to  which  the  other  shall  sell  all  its  busi-  Purchasing  bank 
ness  or  all  the  business  of  any  of  its  departments,  shall  and'oWigltionfo^f 
succeed  to  all  such  relations,  obligations,  trusts  and  liabili-  seUingbank 
ties  and  be  held  liable  to  pay  and  discharge  all  such  debts 
and  liabilities  and  to  perform  all  such  trusts  of  the  selling 
bank  in  the  same  manner  as  if  such  bank  to  which  the  other 
had  sold  had  itself  incurred  the  obligation  or  liability  or 
assumed  the  relation  of  trust,  and  the  stockholders  of  the 
respective   corporations   so   entering  into  such   agreement 
shall  continue  subject  to  all  the  liabilities,  claims  and  de- 
mands existing  against  them  as  such  at  or  before  such  sale. 
Immediately  after  the  execution  of  such  agreement  of  sale  Notice  of  sale  of  bank 
and  purchase  notice  thereof  shall  be  published  for  at  least  to^epubUshed 
four  successive  weeks  in  a  newspaper  in  each  of  the  counties 
of  the  state  in  which  either  of  such  banks  shall  have  its 
principal  place  of  business;  provided,  however,  that  no  action  Limitation  of  actions 
can  be  brought  against  such  selling  bank  or  any  of  its  "ll^^l"^^^^^^^^ 
stockholders  on  account  of  any  deposits  so  transferred  after 
the  expiration  of  one  year  from  the  last  day  of  publication 
herein  required. 


28  CALirOENIA  BANK  ACT 

Consolidation  of        ^j^  affidavit  showing  such  publication  shall  be  filed  in 

the  office  of  the  superintendent  of  banks  within  ten  days 

Affidavit  of  pubiica-  ^£^gj.  ^j^g  j^g^.  publication  thereof.    The  affairs  of  such  selling 

tion  of  notice  of  sale  ^  " 

to  be  filed  bank,  or  selling  department  of  a  bank,  shall  remain  subject 
to  the  provisions  of  this  act. 
state  banks  may         g^.^^  3^^^     ^^    ^^^^^  incorporated  under  the  laws  of  this 

consolidate  -^  ^ 

state  may  consolidate  with  one  or  more  banks  incorporated 
under  the  laws  of  this  state,  its  capital  stock,  properties, 
trusts,  claims,  demands,  contracts,  agreements,  obligations, 
debts,  liabilities  and  assets  of  every  kind  and  description, 
upon  such  terms  and  in  such  manner  as  may  be  agreed 
upon  by  their  respective  boards  of  directors,  a  copy  of  which 
Agreement  of  directors  agreement  must  be  filed  in  the  office  of  the  superintendent 

to  be  approved  by       °  '■  ^ 

Superintendent  of  bauks ;  provided,  that  such  agreement  shall  be  subject  to 
the  approval  of  the  superintendent  of  banks  and  shall  not  be 
Agreement  to  be  valid  Until  such  approval  be  obtained;  provided,  further,  that 
stockholders  no  such  Consolidation  shall  take  eflfect  until  such  agreement 
shall  have  been  ratified  and  confirmed  in  writing  by  the  stock- 
holders of  the  respective  banks  holding  of  record  at  least  two 
thirds  of  the  issued  capital  stock  of  their  respective  banks,  or 
such  agreement  may  be  submitted  to  the  stockholders  of  each 
of  such  corporations  at  a  meeting  thereof  to  be  called  upon  no- 
tice specifying  the  time,  place  and  object  thereof,  addressed  to 
each  stockholder  at  his  last  known  post  oflPice  address  and  de- 
posited in  the  post  office,  postage  prepaid,  at  least  two  weeks 
prior  to  the  date  fixed  for  said  meeting,  and  published  for  at 
least  two  successive  weeks,  prior  to  the  date  of  said  meeting, 
in  a  newspaper  in  each  of  the  counties  of  the  state  in  which 
any  of  such  banks  shall  have  its  principal  place  of  business,  and 
if  such  agreement  shall  be  approved  at  each  of  such  meetings 
of  the  respective  stockholders  separately  by  the  vote  or  ballot 
of  the  stockholders  owning  at  least  two  thirds  of  the  stock  of 
each  such  bank,  the  same  shall  be  the  agreement  of  such  banks. 
Articles  of  incorpora-  j^  ^^^se  of  such  consolidation  "articles  of  incorporation  and 

tion  and  consolidation  ,  ^ 

to  be  prepared  Consolidation"  must  be  prepared,  setting  forth: 
First — The  name  of  the  new  corporation ; 
Second — The  purpose  for  which  it  is  formed; 


GENEBAL    PKOVISIONS  29 

Third — The  place  where    its    principal  business  is  to  be  Consolidation  of 
transacted;  ^'^"^ 

Fourth — The  term  for  which  it  is  to  exist,  which  shall  not  Contents  of  such 
exceed  fifty  years;  ^"^"^^^ 

Fifth — The  number  of  its  directors  (which  shall  not  be  less 
than  three)  and  the  names  and  residences  of  the  persons  ap- 
pointed to  act  as  such  until  their  successors  are  elected  and 
qualified ; 

Sixth — The  amount  of  its  capital  stock  and  the  number  of 
shares  into  which  it  is  divided ; 

Seventh — The  amount  of  stock  actually  subscribed,  and  by 
whom ; 

Eighth — The  names  of  the  constituent  corporations. 

Said  articles  of  incorporation  and  consolidation  must  be  Articles  to  be  signed 

.  r   by  officers  of  banks; 

Signed  and  countersigned  by  the  president  and  secretary  of  approved  by  Supt- 
each  constituent  corporation  and  sealed  with  their  cor-  ratified  by  stock- 
porate  seals.  There  must  be  annexed  thereto  the  approval 
of  the  superintendent  of  banks  and  memoranda  of  the  ratifica- 
tion and  confirmation  thereof  by  the  stockholders  of  each  con- 
stituent corporation,  which  must  be  respectively  signed  and 
acknowledged  by  stockholders  representing  at  least  two  thirds 
of  the  capital  stock  of  their  respective  corporations.  When  Piling  of  articles 
completed  as  aforesaid  said  articles  must  be  filed  in  the  office 
of  the  county  clerk  of  the  county  in  which  is  located  the  prin- 
cipal place  of  business  of  the  new  corporation,  and  a  copy  of- 
the  articles  of  incorporation  and  consolidation  certified  by  such 
county  clerk  must  be  filed  in  the  oflfice  of  the  secretary  of  state, 
and  a  copy  of  the  articles  of  incorporation  and  consolidation 
certified  by  said  secretary  of  state  must  be  filed  in  the  office 
of  the  superintendent  of  banks,  and  also  in  the  office  of  the 
county  clerk  of  any  county  in  which  were  filed  the  original  arti- 
cles of  incorporation  of  either  of  the  constituent  corporations, 
and  thereupon  each  constituent  corporation  named  therein  must  Constituent  corpora- 

,  ,  .  .         ,,  tions  become  extinct; 

be  deemed  and  held  to  have  become  extinct  in  all  courts  and  New  corporation 
places,  and  said  new  corporation  must  be  deemed  and  held  in  succeeds  to  aii  rights 

11111.  1   and  obligations 

all  courts  and  places  to  have  succeeded  to  all  their  several 
capital  stocks,  properties,  trusts,  claims,  demands,  contracts, 
agreements,  assets,  choses  and  rights  in  action  of  every  kind 


30  CALirOENIA  BAITK  ACT 

Consolidated  banks  and  description,  both  at  law  and  in  equity,  and  to  be  entitled 

—continued  ^^  possess,  cnjoy,  and  enforce  the  same  and  every  thereof,  as 

fully  and  completely  as  either  and  every  of  its  constituents 

other  results  of  con-  might  havc  done  had  no  consolidation  taken  place.    Said  con- 
solidation upon  new       ,.  ,        ,  .  i  •         i«  j 
corporation  solidatcd   or  ncw   corporation   must  also,   in   all   courts   and 

places,  be  deemed  and  held  to  have  become  subrogated  to  its 
several  constituents  and  each  thereof,  in  respect  to  all  their 
contracts  and  agreements  with  other  parties,  and  all  their 
debts,  obligations,  and  liabilities,  of  every  kind  and  nature,  to 
any  persons,  corporations,  or  bodies  politic,  whomsoever,  or 
whatsoever,  and  said  new  corporation  must  sue  and  be  sued  in 
its  own  name  in  any  and  every  case  in  which  any  or  either  of 
its  constituents  might  have  sued  or  might  have  been  sued  at 
Existing  contracts  law  or  in  equity  had  no  such  consolidation  been  made.  Noth- 
coMoUd^ti^n.  eti  ^^S  i"  this  scction  contained  shall  be  construed  to  impair  the 
obligation  of  any  contract  to  which  any  of  such  constituents 
were  parties  at  the  date  of  such  consolidation.  All  such  con- 
tracts may  be  enforced  by  action  or  suit,  as  the  case  may  be, 
against  the  consolidated  corporation,  and  satisfaction  obtained 
out  of  the  property  which,  at  the  date  of  the  consolidation,  be- 
longed to  the  constituent  which  was  a  party  to  the  contract  in 
action  or  suit,  as  well  as  out  of  any  other  property  belong- 
ing to  the  consolidated  corporation,  and  the  stockholders  of 
each  constituent  corporation  so  entering  into  such  agreement 
shall  continue  subject  to  all  the  liabilities,  claims  and  demands 
existing  against  them  at  or  before  such  consolidation  to  the 
Right  of  consolidated  samc  extent  as  if  the  same  had  not  been  made.    The  right  of 

^^^*c°di!ng^^to  ^^^^  ^^^  corporation  to  increase  or  decrease  its  capital  stock, 
be  governed  by  to  change  the  uumbcr  of  its  directors,  to  amend  its  articles  of 

ifwrand'byTidf  L°ct  incorporation,  to  change  its  principal  place  of  business,  or  its 
name,  or  to  effect  any  other  organic  change  shall  be  governed 
by  the  general  corporation  laws  of  this  state  and  by  the  bank 
act,  and  the  procedure  to  effect  any  such  change  shall  be  that 
defined  by  the  general  corporation  laws  and  the  bank  act. 

MingUng  of  trust        Sec.  32.    Any  bank  receiving  trust  funds  in  accordance 

funds  with  other        .^1,1  .   •  ,•      1  •  ,  1    ,•  .        .         . 

assets  forbidden  With  the  provisions  of  this  act  relating  to  trust  companies 
except  as  must  not  mingle  such  trust  funds  with  the  other  assets  of 

provided  in  Sec.  25      ,  .  ,  .  •  1     1     •  ^• 

the  corporation,  except  as  otherwise  provided  in  section 


OENEEAL    PEO VISIONS  31 

twenty-five  of  this  act,  and  such  funds  shall  not  be  carried  Trust  funds  norpart 
or  counted  as  any  part  of  the  lawful  money  reserve  provided  °^  ^^^^  reserve 
for  in  this  act.     The  officers  of  any  bank  who  knowingly 
violate  or  consent  to  the  violation  of  this  provision  shall  be  violation 
guilty  of  a  felony. 

(Sec.  33.    Repealed  1913.) 

Sec.  34.     No  bank  shall  purchase  or  invest  its  capital  or  no  bank  to  purchase 
surplus  or  money  of  its  depositors,    or   any   part    of  either,  or  lend  upon  its  own 

^  "^  ,^  /  .  .      -  capital  stock,  unless 

in  shares  of  its  own  capital  stock;  nor  loan  its  capital  or  necessary  to  prevent 

surplus  or  the  money  of  its  depositors,  or  any  part  of  either,  ^°^  °°  *^^^* 

on  shares  of  its  own  capital  stock,  unless  such  purchase  or 

loan  shall  be  necessary  to  prevent  loss  to  such  bank  on  debts 

previously  contracted  in  good  faith.   Every  person  or  corpora-  Penalty 

tion  violating  any  provision  of  this  section  shall  forfeit  to  the 

people  of  the  state  twice  the  nominal  amount  of  such  stock. 

Sec.   35.     No  director,  or  officer,   or  employee,   or  con-  no  director,  etc., 
trolling  stockholder  of  any  bank  shall,  directly  or  indirectly,  financially  interested 

,  °  .;.,,  -  may  sell  to  his  bank 

for  his  own  account,  for  himself,  or  as  the  partner  or  agent  any  note,  etc., 
of  others,  sell  or  transfer,  or  cause  to  be  sold  or  transferred  without  consent  of 

.  Superintendent. 

to  the  bank  of  which  he  is  a  director,  officer,  employee,  or 
controlling  stockholder,  any  note  or  bond  secured  by  any 
mortgage  or  trust  deed  on  real  estate  or  any  contract  arising 
from  the  sale  of  real  estate  in  which  such  director,  or  officer, 
or  employee,  or  controlling  stockholder  is  personally  or 
financially  interested,  without  the  consent  in  writing  of  the 
superintendent  of  banks.  Any  director,  or  officer,  or  em-  violation  made 
ployee,  or  controlling  stockholder  of  any  bank  who  know-  ^^^°^y 
ingly  violates  or  consents  to  the  violation  of  this  provision 
shall  be  guilty  of  a  felony. 

Sec.  36.    No  bank  receiving  deposits  of  money  shall  pur-  Limitation  upon 
chase,  agree  to  purchase,  underwrite  or  guarantee  any  bond  ^^^^1^3°^^"^''*^* 
issue  in  excess  of  five  per  centum  of  its  assets,  except  bonds 
of  the  United  States,  of  the  State  of  California,  of  the  cities, 
cities  and  counties,  counties  or  school  districts  of  this  state. 

Sec.  37.     No  bank  shall  purchase  or  invest  its  capital  or  no  bank  to  purchase 
surplus  or  money  of  its  depositors,  or  any  part  of  either,  in  to^'*^enUo^r^ 
the  capital  stock  of  any  corporation  unless  the  purchase  or  debt 
acquisition  of  such  capital  stock  shall  be  necessary  to  pre- 


32  CALIFOBNIA  BANK  ACl 

vent  loss  to  the  bank  on  a  debt  previously  contracted  in  good 
Stock  so  purchased  faith.    Any  Capital  stock  so  purchased  or  acquired  shall  be 
sold  by  such  bank  within  six  months  thereafter  if  it  can  be 
sold  for  the  amount  of  the  claim  of  such  bank  against  it;  and 
all  capital  stock  thus  purchased  or  acquired  must  be  sold  for 
the  best  price  obtainable  by  said  bank  within  one  year  after 
Penalty  such  purchasc  or  acquisition.     Every  person  or  corporation 
violating  any  provision  of  this  section  shall  forfeit  to  the  peo- 
ple of  the  state  twice  the  nominal  amount  of  such  stock. 
Director,  etc.,  making        Sec.  38.    A  director,  officcr,  agent  or  employee  of  any  bank 

or  conctirring  in  false        , 
entry  or  report,  etc.,    WnO, 

or  omitting  certain        Y'lTst — Kuowinsflv  rcccivcs  or  posscsscs  himsclf  of  any  of 

entries,  etc.,  guilty  °  -^  ^  •' 

of  felony  its  property  otherwise  than  in  payment  for  a  just  demand, 
and  with  intent  to  defraud,  omits  to  make  or  to  cause  or  direct 
to  be  made  a  full  and  true  entry  thereof  in  its  books  and 
accounts ;  or. 

Second — Concurs  in  omitting  to  make  any  material  entry 
thereof ;  or. 

Third — Knowingly  concurs  in  making  or  publishing  any 
written  report,  exhibit  or  statement  of  its  affairs  or  pecuniary 
condition  containing  any  material  statement  which  is  false ;  or, 

Fourth — Having  the  custody  or  control  of  its  books,  wil- 
fully refuses  or  neglects  to  make  any  proper  entry  in  the  books 
of  such  corporation  as  required  by  law,  or  to  exhibit  or  allow 
the  same  to  be  inspected  and  extracts  to  be  taken  therefrom 
by  the  superintendent  of  banks,  his  chief  deputy  or  any  of  his 
examiners,  shall  be  guilty  of  a  felony. 

Officer,  etc..  who         ggc.  39.    Any  officer,  director,  agent,  teller,  clerk  or  em- 
overdraws  his  account  <       i        i         •  i 

or^receives  commis-  ploycc  of  any  bank  who  either, 

"°''*'1ng?oan.°etr.        First— Kuowingly  overdraws  his  account  with  such  bank, 
guilty  of  felony  and  thereby  obtains  the  money,  notes  or  funds  of  any  such 
bank;  or. 

Second — Asks  or  receives  or  consents  or  agrees  to  receive 
any  commission,  emolument,  gratuity  or  reward,  or  any  money, 
property  or  thing  of  value,  for  his  own  personal  benefit,  or  of 
personal  advantage,  for  procuring  or  endeavoring  to  procure 
for  any  person,  firm  or  corporation  any  loan  from,  or  the  pur- 


GENERAL    PBOVISIONS  33 

chase  or  discount  of  any  paper,  note,  draft,  check  or  bill  of 
exchange,  by  such  bank,  or  for  permitting  any  person,  firm  or 
corporation  to  overdraw  any  account  with  such  bank,  is  guilty 
of  a  felony. 

Sec.  40.     No  bank  mentioned  in  this  act  shall  make  any  Contract  with  depositor 
contract  with  any  of  its  depositors  whereby  the  stockholders'  Z^Zyo^""^^^'^ 
liability  provided  for  by  the  constitution  of  this  state  is  in 
any  manner  waived,  and  if  any  such  contract  shall  be  so  made, 
such  contract  shall  be  void. 

Sec.  41.     No  officer,  director,  agent,  or  other  employee  of  No  officer,  etc,  shau 
any  bank  shall  directly  or  indirectly,  for  his  own  personal  bene-  ^!  ^^^erested  in  pur- 

J.  .  ,        .  ,    .         '  chase  of  obhgation  of 

fit,  purchase,  or  be  mterested  m  the  purchase  of  any  obliga-  bank  for  less  than 
tion  of  said  bank  for  a  less  sum  than  shall  appear  upon  the  ^^^^^^"^ 
face  of  such  obligation  to  be  the  value  thereof.   Every  person 
violating  any  provision  of  this  section,  shall  for  each  offense  Penalty 
forfeit  to  the  people  of  the  state,  three  times  the  face  value  of 
any  such  obligation  so  purchased. 

Sec.  42.     No  officer,  director,  agent  or  other  employee  of  No  officer,  etc.,  shaU 
any  bank,  shall  directly  or  indirectly,  for  his  own  personal  bene-   \^  interested  in  pur- 

•^  "^  "^ '  ^  chase  of  assets  of 

fit,  purchase,  or  be  interested  in  the  purchase  of  any  of  the  bank  for  less  than 
assets  of  said  bank  for  a  less  sum  than  the  current  market  "^^^^^t  value 
value  thereof.    Every  person  violating  any  provision  of  this  Penalty 
section,  shall  for  each  offense,  forfeit  to  the  people  of  the  state, 
twice  the  nominal  amount  of  any  such  assets  so  purchased. 

Sec.  43.     No  bank  shall  deposit  any  of  its  funds  in  any  Selection  of 
other  bank  unless  such  other  bank  has  been  designated  as  a  ^«P°^*a^  ^^ 
depositary  for  its  funds  by  the  vote  of  a  majority  of  the 
directors,  or  trustees  of  the  bank  making  the  deposit,  ex- 
clusive of  the  vote  of  any  director  who  is  an  officer,  director, 
or  trustee  of  the  depositary  so  designated;  provided,  how- 
ever, that  any  bank  may  designate  any  other  bank  its  de-  Restrictions  upon 
positary  by  vote  of  a  majority  of  its  directors,  including 
the   vote   of   any    director   or   trustee   who   is   an  officer, 
director  or  trustee  of  the  depositary  so  designated,  if  such 
bank  has  secured  the  previous  approval  of  the  superin- 
tendent of  banks,  which  approval  he  may  at  any  time  revoke 
for  proper  cause. 


34  OALirOENIA  BANK  ACT 

Loan  secured  by  stock  Sec.  44.  No  bank  shall  hereafter  make  a  loan  secured 
°^co^orati^s:-  ^^  ^hc  stock  of  another  -bank,  if  by  making  such  loan  the 
limitation  upon  total  stock  of  such  Other  bank  held  by  such  loaning  bank  as 
collateral  will  exceed  in  the  aggregate  twenty-five  per 
centum  of  the  capital  stock  of  such  other  bank;  provided, 
that  no  loan  upon  the  capital  stock  of  any  bank  shall  be 
made  unless  such  bank  has  been  in  existence  at  least  two 
years  and  has  earned  and  paid  a  dividend  upon  its  capital 
stock;  and  provided,  further,  that  no  bank  may  loan  more 
than  five  per  centum  of  its  assets  upon  the  capital  stock  of 
any  corporation  whatsoever  as  collateral  security. 

Unpaid  interest  not         Sec.  45.     Interest  Unpaid,  although  due  or  accrued,  on 
previousTo^di^dend  ^^^^s  owing  to  any  bank,  shall  not  be  included  in  calculation 
of  its  profits  previous  to  a  dividend. 

Limitation  on  loan         Sec.  46.    No  bank  shall  iuvcst  or  loan  more  than  five  per 
°^oneTo^Tssue  ccntum  of  its  asscts  in  any  one  bond  issue,  except  bonds  of 
the  United  States,  of  the  State  of  California,  of  the  counties, 
cities  and  counties,  cities  or  school  districts  of  this  state. 

Loan  by  commercial        Sec.  47.    No  commercial  bank  shall,' except  for  the  purpose 

bank  on  real  estate-  ^^  facilitating  the  salc  of  property  owned  by  the  bank,  make 
any  loan  on  the  security  of  real  estate,  unless  it  is  a  first  lien 
and  is  either 
First  lien— short  term  ( 1 )  Made  f  or  a  period  of  time  not  exceeding  six  months 
and  upon  security  worth  fifteen  per  centum  more  than  the 
market  value  of  the  real  estate  taken  as  security ;  or 

First  lien— long  term  (2)  Made  for  a  period  of  time  exceeding  six  months  and 
not  exceeding  ten  years  and  does  not  exceed  sixty  per  centum 
of  the  market  value  of  the  real  estate  taken  as  security. 

No  commercial  bank  shall  loan  in  the  aggregate  more  than 

thirty-five  per  centum  of  its  assets  on  real  estate  loans  of  the 

character  specified  in  subdivision  two  of  this  section.     These 

Subsequent  liens  or  provisions,  howcvcr,  shall  uot  prevent  any  bank  from  taking 

incumbranc^e^^when  another  and  immediately  subsequent  mortgage  or  deed  of  trust 
thereon  when  it  already  holds  a  first  mortgage  or  deed  of 
trust  on  such  real  estate,  nor  from  accepting  a  second  lien  on 
real  estate  to  secure  the  repayment  of  a  debt  previously  con- 
tracted in  good  faith;  nor  shall  it  prevent  subsequent  liens  of 
any  kind  from  being  taken  to  secure  the  payment  of  a  debt 


GENERAL    PROVISIONS  35 

previously  contracted  in  good  faith  when,  in  the  judgment  of 
the  directors  of  such  bank,  such  subsequent  liens  are  necessary 
further  to  secure  the  payment  of  any  debts  and  save  such  bank 
from  loss. 

Sec.  48.     Any  national  bank  in  this   state  receiving  the  Supt.  may  examine 
deposits  of  any  bank  organized  and  conducting  business  l^Zt^^^l^, 
under  this  act,  must,  at  the  request  of  the  superintendent  of  of  state  bank 
banks,  submit  to  an  examination  by  him,  or  his  duly  ap- 
pointed examiners,  should  the  superintendent  of  banks  in 
his  discretion  deem  it  necessary  or  desirable  that  such  ex- 
amination be  made;  and  the  expense  of  such  examination 
shall  be  paid  by  such  national  bank ;  and  if  any  such  national  Effect  of  non-com- 
bank  shall  refuse  to  permit  such  examination  to  be  made  by,  ^aX^  ^^  national 
or  under  the  direction  of,  the  superintendent  of  banks,  then 
the  superintendent  of  banks  shall  notify  in  writing  every 
bank  depositing  its  funds  with  such  national  bank,  to  with- 
draw its  deposits  therefrom,  and  all  such  banks  shall  comply 
with  such  order. 


Sec.  49.     It  shall  not  be  lawful  for  any  commercial  bank,  Oniy  savings  banks 

may  solicit  or  re< 
savings  deposits 


individual,  trust  company,  association,  firm,  stock  company,  ^^^y  solicit  or  receive 


copartnership  or  corporation,  to  advertise  or  put  forth  a  sign 
as  a  savings  bank,  either  directly  or  indirectly  or  in  any  way 
to  solicit  or  receive  deposits  or  to  transact  business  in  the 
way  or  manner  of  a  savings  bank,  or  advertise  that  he  or  it 
is  receiving  or  accepting  savings,  or  in  any  way  which 
might  lead  the  public  to  believe  that  such  deposits  are  re- 
ceived or  invested  under  the  same  conditions  or  in  the  same 
manner  as  deposits  in  savings  banks,  except  in  the  case  of 
savings  banks  or  banks  having  savings  departments,  subject 
to  the  provisions  of  this  act.  Any  commercial  bank,  indi-  Penalty 
vidual,  trust  company,  association,  firm,  stock  company, 
copartnership  or  corporation,  violating  any  provision  of  this 
section  shall  forfeit  to  this  state  one  hundred  dollars  a  day 
for  every  day  during  which  such  violation  continues. 

Sec.   50.     Every  bank  shall  post  in  a  conspicuous  place  Bank  shall  post  last 
in  its  banking  room  or  branch  office  the  last  certificate  ob-  certificate  from  Supt. 
tained  from  the  superintendent  of  banks  under  the  provisions 


36  CALIFOBNIA  BANE  ACT 

of  either  section  nine  or  one  hundred  twenty-seven  of  this 
act. 
Court  may  authorize        Sec.  51.    Any  court  having  appointed  and  having  juris- 
executor.  guardian,  jjictjon  of   any  cxccutor,   administrator,   guardian,   assignee, 

trustee,  etc.,  etc.,  •'.  !•        •  <•  l 

to  deposit  in  state  reccivcr,  depositary  or  trustee,  upon  the  apphcation  of  such 
^^"^  executor,  administrator,  guardian,  assignee,  receiver,  deposi- 
tary or  trustee,  or  upon  the  application  of  any  person  having 
an  interest  in  the  estate  administered  upon  by  such  officer  or 
trustee,  after  notice  to  other  parties  in  interest  as  the  court 
may  direct,  and  after  a  hearing  upon  such  application,  may 
authorize  such  officer  or  trustee  to  deposit  any  money  then  in 
his  hands  as  such  officer  or  trustee  or  which  may  thereafter 
come  into  his  hands,  and  until  the  further  order  of  the  court,  in 
any  bank  organized  under  the  laws  of  the  State  of  California ; 
Such  deposit  reUeves  and  upon  such  dcposit  being  made,  the  officer  or  trustee  so 
''''tromuIbiiitretT  depositing  the  same  shall  thereafter  and  while  such  moneys 
remain  on  deposit  in  such  bank,  be  relieved  and  discharged 
from  all  liability  and  responsibility  therefor,  and  the  bond 
required  of  such  officer  or  trustee  given  upon  his  appointment 
shall  be  thereupon  by  said  court  reduced  to  such  an  amount 
Such  deposit  payable  as  the  court  may  deem  reasonable ;  such  deposit  shall  be  repaid 
""^Ispre^e^^ddaS;  ^^ly  upon  the  orders  of  said  court,  and  shall  be  a  preferred 
claim  against  such  bank  and  be  paid  in  full  before  any  other 
depositor  of  such  bank  shall  have  been  paid. 
Certified  checks        Sec.  52.    Whenever  a  check  drawn  on  any  bank  is  certified 
by  any  officer  or  employee  of  such  bank,  the  amount  thereof 
Must  be  immediately  shall  bc  immediately  charged  against  the  account  of  the  person, 
charged  ^^.^  ^^  corporatiou  drawing  the  same. 
Unlawful  to  certify         It  shall  be  unlawful  for  any  officer  or  employee  of  any  bank 
""^"^s^Tuffunds  ^o  certify  any  check  drawn  upon  such  bank  unless  the  person, 
firm  or  corporation  drawing  the  check  has  on  deposit  with  the 
bank  at  the  time  such  check  is  certified,  an  amount  of  money 
subject  to  the  payment  of  such  check,  equal  to  the  amount 
specified  in  such  check. 
Violation  made  felony         Any  officer  or  employee  of  any  bank  who  shall  wilfully 
violate  the  provisions  of  this  section,  or  shall  resort  to  any 
device,  or  receive  any  fictitious  obligations,  directly  or  indi- 
rectly, in  order  to  evade  the  provisions  hereof,  or  who  shall 


GENERAL   PEO VISIONS  37 

certify  checks  before  the  amount  thereof  shall  have  been  regu- 
larly entered  to  the  credit  of  the  drawer,  shall  be  guilty  of  a 
felony. 

Sec.  53.    The  capital  stock  of  any  bank  having  a  capital  Par  value  of  bank 

stock,  shall  have  a  par  value  of  at  least  one  hundred  dollars  $100 

and  the  paid-up  value  shall  be  endorsed  on  the  face  of  each  Paid  up  value  to  be 

certificate  issued,  which  paid-up  value  shall  be  the  same  on  all  Zt^'lt^^ ''""'^' 

certificates  issued.    No  bank  shall  have  preferred  stock.  Preferred  stock 

forbidden 

Sec.  54.     All  real  estate  purchased  by  any  bank  at  sales 
under  pledges,  mortgages  or  deeds  of  trust  for  its  benefit  soid'^SthilTylars* 
for  money  loaned  and  such  as  may  be  conveyed  to  it  by  after  bank  acquires 
borrowers    in    satisfaction    and    discharge    of    loans    made  ^^""^  °°  ^  ^^^^^  ^°° 
thereon  and  all  other  real  estate  owned  or  held  by  it,  which 
is  not  necessary  for  carrying  on  its  business,  must  be  sold 
by  such  bank  within  five  years  after  title  thereto  shall  have 
vested  in  it  by  purchase  or  otherwise.    Parcels  of  such  real  Bank  holding  real 
estate  not  sold  within  said  time  may  be  purchased  by  any  per-  ^y*beIompeUer 
son  wanting  the  same  upon  the  conditions  and  proceedings  fol-  to  sell  same 
lowing :    The  intending  purchaser  may  file  a  petition  in  the  su- 
perior court  in  and  for  the  county  wherein  said  real  estate  or  Court  procedure 
any  portion  thereof  is  situated;  upon  the  filing  of  such  petition  '^^°^^^^ ^^^""^^ 
a  citation  shall  be  issued  out  of  said  court  directed  to  the  bank 
owning  such  real  estate  requiring  such  bank  to  show  cause  on 
a  day  certain  which  shall  be  not  earlier  than  ten  days  after  the 
service  of  such  citation,  why  commissioners  should  not  be  ap- 
pointed by  said  court  for  the  purpose  of  appraising  the  value 
of  the  real  estate  described  in  the  petition  and  of  selling  the 
same  at  public  auction  under  the  provisions  of  this  section.     If 
there  shall  be  any  liens  or  encumbrances  of  record  against  such 
real  estate  the  person  or  persons  holding  such  liens  or  encum- 
brances shall  likewise  be  cited  and  the  court  shall  in  its  final 
decree  distribute  the  proceeds  of  such  sale,  if  a  sale  thereof 
shall  be  made,  according  to  the  equities  of  the  parties.     If  it 
shall  appear  at  the  hearing  of  such  petition  that  the  real  estate 
therein  sought  to  be  purchased  is  held  by  such  bank  in  violation 
of  the  provisions  of  this  section  or  of  the  constitution  of  this 
state,  the  court  shall  appoint  three  commissioners  to  appraise 
the  value  thereof  and  sell  the  same  at  public  auction  at  the 


38  CALIFOENIA  BANK  ACT 

Forced  sales  of  real  county  Seat  of  the  county  wherein  said  real  estate  or  any  part 
thereof  is  located.  Notice  of  which  said  sale  shall  be  given  to 
Provisions  for  sale  the  bank  Owning  said  real  estate  and  to  any  other  persons  in- 
terested therein  as  shown  by  the  records  of  such  county  at  least 
ten  days  before  the  date  of  such  sale  and  shall  be  published 
once  a  week  for  three  successive  weeks  in  some  newspaper 
published  in  the  county  where  such  real  estate  or  any  part 
thereof  may  be  located,  or  if  no  newspaper  shall  be  published 
in  such  county,  then  in  a  newspaper  published  in  some  neigh- 
What  notice  of  sale  boring  county.    Such  notice  shall  state  the  time  and  place  of 

shall  state  cj  ^  r 

such  sale  and  shall  describe  the  real  estate  to  be  sold  with  com- 
mon certainty  and  state  the  value  thereof  as  fixed  by  the  ap- 
praisement of  such  commissioners  and  state  that  no  bid  less 
than  such  appraised  value  will  be  received  therefor.  No  sale 
Conditions  of  sale  shall  be  made  for  an  amount  less  than  the  appraised  value  of 
such  real  estate  fixed  by  said  commissioners,  and  in  the  event 
that  no  bid  is  received  at  such  sale  at  least  equal  to  said  ap- 
praised value  of  said  real  estate  no  intending  purchaser  can  in- 
stitute the  proceedings  provided  for  in  this  section  within  one 
Powers  given  to  vest  year  thereafter.  In  case  of  any  sale  made  under  the  provisions 
tit  e  in  pur  aser  ^^  ^j^j^  scction  and  of  the  refusal  of  any  bank  owning  such  real 
estate  or  of  any  lienholder  or  encumbrancer  to  execute  the 
conveyances  or  releases  necessary  or  proper  to  vest  the  title  of 
such  bank,  lienholder  or  encumbrancer  in  the  purchaser  thereof 
the  court  shall  have  power  in  such  proceedings  to  direct  said 
commissioners  to  execute  such  deeds,  conveyances  or  releases 
upon  the  payment  to  them  of  the  purchase  price  therefor.  The 
Fees,  costs,  etc..  by  fees  of  such  commissioners  and  cost  of  sale  shall  be  fixed  by 
the  court,  upon  making  such  appointment,  but  the  entire  ex- 
pense thereof  shall  not  exceed  one  hundred  dollars.  The 
cost  of  any  such  proceedings  shall  be  borne  by  the  intending 
purchaser  if  no  sale  shall  be  made,  but  if  a  sale  shall  be  made 
the  costs  of  such  proceedings  shall  be  borne  by  the  purchaser 
of  the  property  and  the  person  who  filed  the  petition  and  ad- 
vanced the  costs  of  such  proceedings  shall  be  reimbursed  in 
Returns  of  sales  casc  he  shall  not  become  such  purchaser.  All  sales  hereunder 
shall  be  returned  to  the  court  having  jurisdiction  of  the  matter 
in  the  same  manner  as  in  the  case  of  sales,  by  commissioners, 
of  real  estate  on  foreclosure  of  mortgages.  Nothing  in  this  sec- 


GENERAL   PROVISIONS  39 

tion  contained  shall  be  deemed  to  affect  the  power  of  the  super-  Supt.  may  require 
intendent  of  banks  to  require  the  writing  down  of  the  value  of  value 
real  estate  held  by  any  bank,  at  any  time,  when  such  writing 
down  shall  be  proper. 

Sec.  55.  Receiving  deposits,  issuing  certificates  of  de-  what  transactions 
posit,  checks  and  bills  of  exchange,  and  the  like,  in  the  trans-  ^^^reate  d^t/'^^tc. 
action  of  the  ordinary  business  of  a  bank,  must  not  be  con- 
strued to  be  the  creation  of  debt  within  the  meaning  of  the 
phrase  "create  debt"  in  section  three  hundred  nine  of  the 
Civil  Code,  nor  of  indebtedness  within  the  meaning  of  the 
phrase  "the  capital  stock  cannot  be  diminished  to  an  amount 
less  than  the  indebtedness  of  the  corporation"  in  section 
three  hundred  fifty-nine  of  the  Civil  Code,  except  that  no 
bank  shall  reduce  its  capital  stock  to  an  amount  less  than 
is  required  by  this  act  to  be  maintained  by  such  bank,  or  less 
than  any  indebtedness  of  such  bank  other  than  such  deposits. 

The  terms  "real  estate,"  or  "real  property,"  or  "personal  Definition  of  ^ 
property,"  when  used  in  this  act  shall  have  the  meaning  -real  property." 
defined  in,  and  shall  be  construed  in  accordance  with  the  "personal  property" 
provisions  of  title  I  of  part  I  of  division  second  of  the  Civil 
Code. 

Sec.  56.  Any  bank  organized  and  existing  under  the  laws  state  bank  authorized 
of  this  state  is  hereby  authorized  and  empowered  to  join  or  reslrve  a^Sita," 
associate  itself  with  any  "national  reserve  association 
of  the  United  States"  or  branch  thereof,  or  any  plan 
now  or  hereafter  created  or  established  Ly  act  of  con- 
gress whether  such  banking  or  currency  association  or 
plan  be  created  by  congress  under  the  above  or  any 
other  name.  Nothing  in  this  act  shall  prohibit  any  such 
bank  from  joining  or  associating  itself  with  any  such 
association  or  plan  or  branch  thereof  nor  from  invest- 
ing any  part  of  its  capital  or  surplus  in  the  stock  of  such 
association,  plan  or  branch  thereof  in  accordance  with  the 
terms    and    provisions    of    such    act    of   congress;    provided,  investment  in  such 

,  ,      .  1     i,    .  it        association  limited 

however,  that  such  investment  shall  in  no  case  exceed  the 
mlinimum  amount  required  to  join  or  associate  itself  With 
such  association,  plan  or  branch  thereof.  Any  bank  joining 
or  associating  itself  with  such  association,  plan  or  branch 


40  CALirOENIA  BANK  ACT 

thereof,  shall  be  permitted  to  conform  to  and  transact  its 
business  in  accordance  with  the  terms  and  provisions  of 
such  act  of  congress  creating  the  same  and  the  rules  and 
regulations  of  such  association,  plan  or  branch  thereof,  any- 
thing in  this  act  to  the  contrary  notwithstanding. 


ARTICLE  II. 

SAVINGS  BANKS. 


Capital  required        Sec.  60.     Every  savings  bank  hereafter  organized  must 
of  savings  banks  j^^^^  ^^^^  ^p  -^^  ^^^^  ^  Capital  stock  of  not  Icss  than 

Population  not  over         (a)  Twcnty-five  thousaud  dollars  if  its  principal  place  of 
business  is  located  in  any  locality  the  population  of 
which  does  not  exceed  five  thousand  persons; 
popuiS-$5oooo         (^)  ^^^*y  thousand  dollars  if  its  principal  place  of  busi- 
ness is  located  in  any  city  the  population  of  which  is 
more  than  five  thousand  persons,  but  does  not  ex- 
ceed twenty-five  thousand  persons; 
poptdito-^moSo         (^)  O^^  hundred  thousand  dollars  if  its  principal  place  of 
business  is  located    in    any    city    the    population    of 
which  is  more  than  twenty-five  thousand  persons  but 
does  not  exceed  one  hundred  thousand  persons; 
100.000  to  200.000         ((1)  Two  hundred  thousand  dollars  if  its  principal  place  of 

population— $200,000  ^^.  ,  ^  ir'i' 

business  is  located  m  any  city  the  population  of  which 
is  more  than  one  hundred  thousand  persons  but  does 
not  exceed  two  hundred  thousand  persons ; 
voX^^Z        («)  Three  hundred  thousand  dollars  if  its  principal  place 
of  business  is  located  in  any  city  the  population  of 
which  is  more  than  two  hundred  thousand  persons. 
Excepting  that  any  savings  bank  organized  without  capital 
stock  must  have  a  reserve  fund  of  at  least  one  million  dollars. 
Until  the  capital  stock  or  reserve  fund  hereinbefore  re- 
quired shall  be  actually  paid  in,  the  superintendent  of  banks 
shall  refuse  to  issue  the  certificate  required  by  this  act.    The 
tion'not'reti^^rtive  ^o^egoing  classification  shall  not  apply  to  any  savings  bank 
already  in  existence  which  has  received  its  certificate  to  do  a 
banking  business  from  the  superintendent  of  banks ;  nor  to 


SAVINaS  BANKS  41 

any  bank  the  location  of  which  shall  have  been  included  by  Capital  requirements 

-.  -      .  .......  (.  -j_  r  of  existing  savings 

annexation  or  consolidation  withm  the  limits  of  a  city  oi  a  bank  not  affected  by 
class  requiring  a  larger  capitalization,  but  no  bank  thus  ex-  annexation,  etc. 
cepted  shall  be  permitted  to  establish  any  new  branch  office 
as  provided  in  section  nine  of  this  act  or  to  remove  its  place 
of  business  from  the  original  limits  of  the  city  or  township 
Wherein  it  was  located  prior  to  such  annexation  or  con- 
solidation until  it  shall  have  the  capital  required  of  banks 
in  such  city  not  within  said  exception.  Such  excepted  banks 
may  not  in  any  case  decrease  their  capital  stock  but  may 
increase  the  same  in  the  manner  provided  by  law  to  an 
amount  either  greater  or  less  than  that  required  of  banks 
in    such    city    not    within    said    exception ;    provided,    that  See.  i9  and  Sec.  23 

,      ,,    ,  ,  1    .  rr      .    j^i  •    •  unaffected  by  Sec.  60 

nothing  herein  shall  be  construed  to  affect  the  provisions 

of  section  nineteen  of  this  act  relative  to  the  proportion 

of  capital  and  surplus  to  deposits  or  of  section  twenty-three 

of  this  act  relative  to  the  capital  stock  required  of  banks 

doing  a  departmental  business.    The  provisions  of  section  How  population  is 

twenty-three  of  this  act,  as  to  population,  shall  apply  to    ®*^™''''* 

any  bank  organized  under  the  provisions  of  this  section. 

Sec.  61.     Any  savings  bank  may  purchase,  hold  and  con-  Property  which 
vey  real  or  personal  property  as  follows:  mry^pL^'^ase. 

1 .  The  lot  and  building  in  which  the  business  of  the  bank  hold  and  convey 

is  carried  on;  furniture  and  fixtures,  vaults  and  safe  deposit  furniture, fi^xtTrrs!*etc. 
vaults  and  boxes  necessary  or  proper  to  carry  on  its  banking  two-thirds  vote 
business;  such  lot  and  building,  furniture  and  fixtures,  vaults  necessary  for  purchase 
and  safe  deposit  vaults  and  boxes  shall  not,  in  the  aggregate,  be  o^  construction 
carried  on  the  books  of  such  bank  as  an  asset  to  an  amount 
exceeding  its  paid  up  capital  and  surplus;  and  hereafter,  the 
authority  of  a  two-thirds  vote  of  all  of  the  directors  shall  be 
necessary  to  authorize  the  purchase  of  such  lot  and  building, 
or  the  construction  of  such  building. 

2.  Such  as  may  have  been  mortgaged,  pledged  or  con-   (2)  Property  mort- 
veyed  to  it  in  trust  for  its  benefit  in  good  faith,  for  money  c^vtyed^ffsecurity 
loaned  in  pursuance  of  the  regular  business  of  the  corpora-  for  loans 

^^O"-  (3)  Property 

3.  Such  as  may  have  been  purchased  at  any  sales  under  purchased  at  sales 

,,  ,--  ,r.,  /-r         under  pledge, 

pledge,  mortgage  or  deed  of  trust  made  for  its  benefit  for  mortgage,  etc. 


42  CALIFOBNIA  BANE  ACT 

money  so  loaned  and  such  as  may  be  conveyed  to  it  by  bor- 
rowers in  satisfaction  and  discharge  of  loans  made  thereon. 

What  personal  prop-  j^q  savins:s  bank  shall  purchase,  own,  or  sell  personal  prop- 
erty savings  bank  ^  ,  ^  r      r 

may  purchase,  own  crty,  exccpt  such  as  may  be  requisite  for  its  immediate  ac- 
orseii:  QQ^niodation  for  the  convenient  transaction  of  its  business, 
notes  or  bonds  secured  by  trust  deeds  or  mortgages  on  real 
estate,  bonds,  securities  or  evidences  of  indebtedness,  pub- 
lic or  private,  gold  or  silver  bullion  and  United  States  mint 
certificates  of  ascertained  value,  and  evidences  of  debt  issued 
What  bonds,  securities,  by  the  United  States.    No  savings  bank  shall  purchase,  own, 

etc.,  savings  bank    .     ,  -  ,  ,  .  .  .  ,  <•.<<< 

may  purchase,  own  noid  OT  couvcy  bonds,  sccuritics  Or  cvidenccs  of  mdebtedness, 
or  sell:  public  or  private,  except  as  follows: 
u.  s.  Bonds,  etc.         (a)  Bonds  or  interest  bearing  notes  or  obligations  of  the 
United  States,  or  those  for  which  the  faith  and  credit  of  the 
United  States  are  pledged  for  the  payment  of  principal  and 
interest ; 
Bonds  of  this  state         (^)  Bonds  of  this  State,  or  those  for  which  the  faith  and 
credit  of  the  State  of  California  are  pledged  for  the  payment 
of  principal  and  interest ; 
Bonds  of  any  state         (c)  Bouds  of  any  State  in  the  United  States  that  has  not, 
t,  etc.  ^j^bin  five  years  previous  to  rhaking  such  investment  by  such 
bank,  defaulted  in  the  payment  of  any  part  of  either  principal 
or  interest; 
Bonds  of  any  Caiifor-         ((/)  Bouds  of  any  county,  citv  and  county,  city  or  school 

nia  county,  city  and     ,.  ^\   I      r  ^w       ^   ^      \        ^        £  /         /j-    •   •         • 

county,  city,  school  district  of  this  State ;  bonos  of  any  permanent  road  division  in 
district,  county  road  any  county  issucd  in  pursuance  of  the  provisions  of  article  IX 

division,  sewer,  drain-      ,  t,.        .  ,      ,  ^^  ^^^       .     ,        t-»    <•   •      i    .-     i         i  i         r 

age,  reclamation.  Chapter  II ;  title  VI ;  part  III  of  the  Political  Code ;  bonds  of 
protection,  sanitary,  any    scwcr    district,    drainage    district,    reclamation    district, 

or  irrigation  districts,  .  ,  •        .  •  i  •        •  •        «  i 

etc..  subject  to  speci-  protcction  distnct,  or  sanitary  district  organized  under 
fied  limitations  the  laws  of  this  State;  and  any  irrigation  district  bonds 
which  the  law  may  now  or  hereafter  authorize  to  be 
used  as  security  for  the  deposit  of  public  moneys; 
provided,  that  the  total  amount  of  bonds  so  issued  by 
any  such  sewer  district,  drainage  district,  protection  district 
or  sanitary  district,  does  not  exceed  fifteen  per  centum  of  the 
value  of  the  taxable  property  in  said  district  as  shown  by  the 
last  equalized  assessment  roll  of  the  county  in  which  said 
district  is  located ;  and  promded,  further,  that  the  total  amount 


SAVINGS  BANKS  43 

of  bonds  issued  by  any  such  irrigation  district  does  not  exceed  Bonds  which  are 

-     ,  ,  1  r     1       1        1      legal  investments 

Sixty  per  centum  of  the  aggregate  market  value  of  the  lands  —continued 
within  such  district,  and  of  the  water,  water  rights,  canals, 
reservoirs,  reservoir  sites  and  irrigation  works  owned  or  to  be 
acquired  or  constructed  with  the  proceeds  of  any  of  such  bonds, 
by  said  district,  such  facts  in  reference  to  bonds  of  irrigation 
districts  to  be  determined  by  a  commission  now  or  hereafter 
authorized  by  law  to  ascertain  and  report  upon  such  facts. 

(e)  Bonds  of  any  county,  city  and  county,  city  or  town.  Bonds  of  any  county, 
in  any  state  of  the  United  States  other  than  the  State  of  Call-  city  and  county  city 

•'  or  town  in  any  foreign 

fornia,  issued  under  authority  of  any  law  of  such  state,  which  state,  meeting  speci- 
county,  city  and  county,  city  or  town,  had,  as  shown  by  the  ^  *"equiremen  s 
federal  or  state  census  next  preceding  such  investment,  a  popu- 
lation of  more  than  twenty  thousand  inhabitants;  provided, 
however,  that  the  entire  bonded  indebtedness  of  such  county, 
city  and  county,  city  or  town,  including  such  issue  of  bonds 
does  not  exceed  fifteen  per  centum  of  the  value  of  the  tax- 
able property  therein  as  shown  by  its  last  equalized  assess- 
ment roll;  and  provided,  further,  that  such  county,  city  and 
county,  city  or  town,  or  the  state  in  which  it  is  located  has 
not  defaulted  in  payment  of  either  principal  or  interest  due 
upon  any  legally  authorized  bond  issue  within  five  years 
next  preceding  such  investment. 

(/)     (1)     Bonds    of    any     railroad     corporation    incor-  (See  note  page  49) 
porated  under  the  laws  of  the  State  of  California  and  operat- 
ing exclusively  therein,  provided  said  corporation  has  had,  for  Bonds  of  California 
its  fiscal  year  next  preceding  such  investment,  net  earnings,  ''^;:^:^:tl 
after  payment  of  all  maintenance  charges,  operating  expenses  fied  requirements 
and  taxes,  sufficient  to  pay  the  interest  on  all  of  its  outstand- 
ing mortgage  indebtedness ;  or 

(2)     Bonds  of  any  railroad  corporation  incorporated  un-  Bonds  of  any  railroad 
der  the  laws  of  any  other  state  in  the  United  States,  operat-  corporation  organized 

-^  '      ^  under  laws  of  any 

mg  at  least  five  hundred  miles  of  standard  gauge  track  exclu-  foreign  state,  meeting 
sive  of  sidings ;  provided,  said  corporation  has  had   for  its  '^"^^"^  requirements 
fiscal    year     next     preceding    such     investment,     net     earn- 
ings, after  the  payment  of  all  maintenance  charges,  operat- 
ing expenses  and  taxes,  amounting  to  at  least  one  and  one- 


44  CALIFOBNIA  BANE  ACT 

Bonds  which  are  half  timcs  the  interest    on    all    its    outstanding    mortgage 

'^"iTnUnu^J  indebtedness;  or 

Guaranteed  bonds  of         (3)     Bonds  of  any  railroad  corporation,  the  payment  of 

any  raUroad  corpora-  ^^ich  has  been  guaranteed,  both  as  to  principal  and  interest, 

tion  meeting  specified  *=*  ,  .  . 

requirements  by  a  railroad  corporation  meetmg  the  requirements  of  either 
subdivision  (1)  or  (2)  of  paragraph  (f)  of  this  section;  the 
income  of  which  latter  corporation,  together  with  the  income 
of  any  corporation  whose  bonds  it  has  guaranteed,  shall  have 
been  sufficient  to  pay  all  its  maintenance  charges,  operating 
expenses,  taxes  and  interest  on  all  its  outstanding  mortgage 
indebtedness  and,  in  addition  thereto,  interest  on  the  total 
outstanding  mortgage  indebtedness  of  any  other  corporation 
the  payment  of  which  it  has  guaranteed,  for  the  periods 
specified  in  the  respective  subdivisions  of  this  paragraph 
relating  thereto;  provided,  that  the  excess  of  income  of  any 
corporation  whose  bonds  have  been  so  guaranteed,  over 
its  maintenance  charges,  operating  expenses,  taxes  and 
interest  on  its  outstanding  mortgage  indebtedness,  shall  not 
apply  to  or  be  included  in  determining  the  income  so  re- 
quired. 
Additional  require-  In  determining  the  income  of  any  corporation  specified  in 
b^SVptdfiedin  paragraph  (f)  of  subdivision  three  of  this  section,  there 
paragraph  (f)  of  shall  be  included  the  income  of  any  corporation  or  corpora- 
tions out  of  which  it  shall  have  been  formed  through  con- 
solidation or  merger,  and  of  any  corporation  or  corporations, 
the  entire  business  and  income  producing  property  of  which 
the  corporation  issuing  such  bonds  has  wholly  acquired. 

All  bonds  authorized  for  investment  by  paragraph  (f)  of 
subdivision  three  of  this  section  must  be  secured  by  a  mort- 
gage or  trust  deed  which  is  at  the  time  of  making  such 
investment  either  a  first  mortgage  or  deed  of  trust,  a 
refunding  mortgage  or  deed  of  trust  providing  for  the  re- 
tirement of  all  prior  lien  mortgage  debts  of  said  corporation,  or 
an  underlying  or  divisional  closed  mortgage  or  trust  deed  of 
property  which  forms  a  part  of  the  operating  system  of  the 
corporation  then  owning  said  property. 
Further  requirements  No  savings  bank  shall  purchasc  the  bonds  of  any  rail- 
road corporation  deriving  less  than  twenty  per  centum  of  its 
gross  receipts  from  passenger  revenues. 


subdivision  3 


as  to  railroad  bonds 


SAVINGS  BANES  45 

The  term  "railroad  corporation"  when  used  in  paragraph  Bonds  which  are 
(f)  of  subdivision  three  of  this  section  shall  have  the  mean-  —continued 
ing  defined  in  the  "Public  Utilities  Act"  approved  December  "Railroad  corpora- 

^^     ^  _^ .  .  tion"  defined 

23,  1911. 

(sr)    Bonds  of  any  street  railroad  corporation ;  or  of  any  ^°^^^  °^  ^*^««*  ^^^ 

...  road  corporation,  etc., 

gas;  water;  pipe  line;  light;  power;  light  and  power;  gas,  or  other  "public  utuity" 
light  and  power;  electrical;  telephone;  telegraph;  or  tele-  'ZT^l^^^^ 
phone  and  telegraph  corporation  or  of  any  other  "public  ted  requirements 
utility"  incorporated  under  the  laws  of  the  State  of  Cali- 
fornia ;  and 

(1)  Operating  exclusively  in  the  State  of  California, 
provided,  said  corporation  has  had,  for  its  fiscal  year  next 
preceding  such  investment,  net  earnings,  after  the  payment 
of  all  maintenance  charges,  operating  expenses  and  taxes, 
amounting  to  one  and  one-half  times  the  interest  on  all  its 
outstanding  mortgage  indebtedness;  or 

(2)  Operating  its  property  in  part  within  the  State  of 
California,  provided,  said  corporation  has  had,  for  each  of 
its  two  fiscal  years  next  preceding  such  investment,  net 
earnings,  after  the  payment  of  all  maintenance  charges, 
operating  expenses  and  taxes,  amounting  to  one  and  one- 
half  times  the  interest  on  all  of  its  outstanding  mortgage 
indebtedness ;  or 

(3)  The  payment  of  which  is  guaranteed,  both  as  to 
principal  and  interest,  by  a  public  utility  corporation  meeting 
the  requirements  of  either  subdivision  (1)  or  (2)  of  para- 
graph (g)  of  this  section,  the  income  of  which  latter  cor- 
poration, together  with  the  income  of  any  corporation  whose 
bonds  it  has  guaranteed,  shall  have  been  sufficient  to  pay  all 
its  maintenance  charges,  operating  expenses,  taxes  and  inter- 
est on  all  its  total  outstanding  mortgage  indebtedness,  and 
in  addition  thereto,  interest  on  the  total  outstanding  mort- 
gage indebtedness  of  any  other  corporation  the  payment 
of  which  it  has  guaranteed,  for  the  period  specified  in  the 
respective  subdivisions  of  this  paragraph  relating  thereto; 
provided,  that  the  excess  of  income  of  any  corporation 
whose  bonds  have  been  so  guaranteed,  over  its  maintenance 
charges,  operating  expenses,  taxes  and  interest  on  its  out- 


46  CALIFOBNIA  BANK  ACT 

Bonds  which  are  Standing  mortgage  indebtedness  shall  not  apply  to  or  be 
legal  |^®^*jyj^®^^  included  in  determining  the  income  so  required. 

In  determining  the  income  of  any  corporation  specified  in 
Income  of  corporation  paragraph   (g)   of  subdivision  three  of  this  section,  there 
shall  be  included  the  income  of  any  corporation  or  corpora- 
tions out  of  which  it  shall  have  been  formed  through  con- 
solidation or  merger,  and   of  any  corporation  the  entire 
business  and  income  producing  property  of  which  the  cor- 
poration issuing  such  bonds  has  wholly  acquired. 
All  bonds  authorized        All  bonds  authorized   for  investment  by  paragraph    (g) 
by  paragraph  (g)     £  gubdivision  three  of  this  section  m-ust  be  secured  by  a 

must  be  secured  by  _  -^ 

mortgage  or  deed  of  mortgage  or  trust  dccd  which  is  at  the  timje  of  making  such 
^J.r^ui  investment;  either 
certain  limitations  I     ^  closcd  first  mortgage  or  deed  of  trust;  or 

II.  A  first  mortgage  or  deed  of  trust  containing  pro- 
visions restricting  the  issuance  of  further  bonds  until  such 
time  as  the  income  of  said  corporation  shall  have  been  at  least 
sufficient,  during  the  twelve  months  next  preceding  the  is- 
suance of  any  additional  bonds,  to  pay  all  maintenance 
charges,  operating  expenses,  taxes  and  one  and  one-half  times 
the  interest  on  all  its  mortgage  indebtedness  then  outstand- 
ing and  on  the  additional  bonds  then  proposed  to  be  issued ; 
or 

III.  A  refunding  mortgage  or  deed  of  trust  providing 
for  the  retirement  of  all  prior  lien  mortgage  debts  of 
said  corporation,  and  restricting  the  issuance  of  further 
bonds  until  such  time  as  the  income  of  said  corpora- 
tion shall  have  been  at  least  sufficient,  during  the  twelve 
months  next  preceding  the  issuance  of  any  additional  bonds, 
to  pay  all  maintenance  charges,  operating  expenses,  taxes  and 
one  and  one-half  times  the  interest  on  all  its  mortgage 
indebtedness  then  outstanding,  and  on  the  additional  bonds 
then  proposed  to  be  issued ;  or 

IV.  An  underlying  or  divisional  closed  mortgage  or  trust 
deed  of  property  which  forms  a  part  of  the  operating  system 
of  the  corporation  then  owning  said  property.  In  the  case  of 
bonds  secured  by  an  underlying  or  divisional  closed  mortgage 
or  trust  deed,  the  net  income  required  by  this  section  shall  be 


SAVINGS  BANKS  47 

based  exclusively  upon  the  income,  maintenance  charges,  ope-  Bonds  which  are 
rating  expenses,  taxes  and  mortgage  indebtedness  of  or  against  —continued 
the  property  covered  by  such  underlying  or  divisional  closed 
mortgage  or  trust  deed,  or  on  the  proper  proportionate  share  of 
such  property  in  the  general  income,  maintenance  charges,  ope- 
rating expenses,  taxes  and  mortgage  indebtedness  of  the  cor- 
poration then  owning  such  property;  provided,  however,  that 
if  the  payment  of  the  bonds  secured  by  such  underlying  or 
divisional  closed  mortgage  or  trust  deed  shall  be  guaranteed  or 
assumed  by  the  corporation  then  owning  the  property  securing 
the  same,  such  bonds  shall  be  legal  investments  for  savings 
banks,  if  the  net  income  of  such  corporation  from  all  sources 
after  paying  all  of  its  maintenance  charges,  operating  expenses, 
taxes  and  mortgage  indebtedness  shall  equal  the  amount  herein 
required,  notwithstanding  any  insufficiency  of  the  income  de- 
rived from  the  property  covered  by  such  underlying  or  di- 
visional closed  mortgage  or  trust  deed  to  meet  the  requirements 
of  this  section. 

The  term   "street   railroad   corporation,"   "pipe   line   cor-  -street  raUroad  cor- 
poration," "gas  corporation,"  "electrical  corporation,"  "tele-  te°^fdeLTd\T'' 
phone  corporation,"  "telegraph  corporation,"  "water  corpora-  reference  to  "Public 
tion,"  and  "public  utility,"  when  used  in  paragraph  (g)  of 
subdivision  three  of  this  section,  shall  each  have  the  mean- 
ing defined  in  the  "Public  Utilities  Act"  approved  December 
23,  1911. 

{h)     Notes  or  bonds  secured  by  first  mortgage  or  deed  of  Notes  secured  by  first 

,  _  , .  ,  .  -  .  mortgage  or  deed  of 

trust  or  Other  first  lien  upon  real  estate,  improved  or  unim-  trust  or  other  first  Uen 
proved :  provided,  that  the  entire  note  or  bond  issue  shall  not  ex-  ^^^^  ^^  estate,  etc. 

^  '  ^  1  r  t  1  —with  certain 

ceed  sixty  per  centum  of  the  market  value  of  such  real  estate,  or  limitations 
such  real  estate  with  improvements,  taken  as  security ;  cmd  pro- 
vided, further,  in  case  the  said  note  or  bond  issue  is  created 
for  a  building  loan  on  real  estate,  that  at  no  time  shall  the 
entire  outstanding  note  or  bond  issue  exceed  sixty  per 
centum  of  the  market  value  of  the  real  estate  and  the 
actual  cost  of  the  improvements  thereon  taken  as  security. 

(*)     Collateral  trust   bonds   or  notes   when   secured  by  (See  note  page  49) 
either : 


48  CALIFOBNIA  BANE  ACT 

Bonds  which  are        (1)    Deposit  of  bonds  authorized  for  investment  by  this 
^^  ^ontiimed  section,  of  a  market  value  at  least  fifteen  per  centum  in  ex- 
cess of  the  par  value  of  the  collateral  trust  bonds  or  notes 
issued;  or 
CoUaterai  trust  bonds        (2)     Deposit  of  bonds  authorized  for  investment  by  this 
Wepo^t^ofruthot  section,  and  other  securities,  of  a  combined  market  value  at 
ized  bonds  as  least  twenty  per  centum  in  excess  of  the  par  value  of  the  col- 
lateral trust  bonds  or  notes  issued ;  provided,  that  the  par  value 
of  said  collateral  trust  bonds  or  notes  shall  in  no  case  exceed 
the  market  value  of  that  portion  of  the  security  represented  by 
bonds  authorized  for  investment  by  this  section. 
Bonds  legal  for  invest-         (/)     Bouds  legal  for  investment  by  savings  banks  in  the 
ban'ks'ilNewYoS  ^^^^^^  ^^  ^^^  York  or  Massachusctts ;  provided,  however, 
and  Mass.,  with  that  as  to  bonds  of  the  character  specified  in  paragraph  (c) 
specified  restrictions  ^^  ^^^  ^^  subdivisiou  three  of  this  scctiou,  such  bouds  shall 
also  conform  to  the  requirements  of  either  of  such  para- 
graphs. 

Certificates  of  par-         (k)     Certificates  issued  by  a  corporation  organized  under 
ticipation  in  first  ^j^^  j^^g  q£  ^j^jg  g^^^^  ^j^j^  ^  paid-up  Capital  stock  of  not  less  than 

mortgage  on  real  ^  r        r 

estate,  etc.,  issued  oue  hundrcd  thousaud  dollars,  evidencing  and  conferring  par- 
by  domestic  corpora^  ticipation  to  an  indicated  amount  in  a  first  mortgage  on  real 

tion — under  specified  ^  o    o 

restriction  estate  and  the  debt  secured  thereby,  and  guaranteeing  the  pay- 
ment of  the  principal  of  the  mortgage  debt  at  its  maturity  or 
within  some  specified  time  thereafter  and  agreeing  to  pay 
interest  on  the  amount  of  the  participation  at  some  specified 
rate,  the  mortgage  however  and  debt  thereby  secured  to  be 
assigned  to  a  trust  company  and  held  by  it  as  security  for  the 
payment  of  said  mortgage  certificates  and  for  the  perform- 
ance of  all  conditions  imposed  thereby  upon  the  corporation 
issuing  the  same;  provided,  the  said  first  mortgage  indebted- 
ness shall  not  exceed  sixty  per  centum  of  the  market  value  of 
the  real  estate  taken  as  security,  and  provided,  further,  that  the 
trust  company  shall  certify  on  each  certificate  that  the  aggre- 
gate amount  of  the  certificates  issued  evidencing  and  con- 
ferring participation  in  any  one  such  mortgage  and  mortgage 
debt  does  not  exceed  the  principal  of  the  said  mortgage  debt; 
but  provided,  nevertheless,  that,  unless  such  certificates  are 
made  legal  investment  for  savings  banks  by  other  law  of  this 


SAVINaS  BANKS  49 

State,  no  savings  bank  shall  purchase  any  such  certificates  until  Bonds  which  are 

legal  investm 
— continued 


the  corporation  issuing  the  same  has  first  obtained  the  written  *****  investments 


approval  of  the  superintendent  of  banks  to  such  certificates  as 
an  investment  for  savings  banks.     The  actual  expense  of  in-  Approval  of 
vestigating  any   issue  of   such   certificates   presented  to  the  fo^'purch'a^^^ch  cer- 
superintendent  of  banks  for  approval  shall  be  paid  by  the  cor-  tificates  required. 

,  ,     ,  .  ,  ,.  i        .         tinless  same  made  legal 

poration  presenting  the  same,  and  the  superintendent  of  banks,  investment  by  other 
before  making  such  investigation  may  require  a  cash  deposit  law  of  this  state 
of  such  amount  as  he  may  deem  necessary  to  cover  such  ex-  Expense  of 
pense.     The  superintendent  of  banks  may  accept  and  act  upon  Superintendent's 

,  .    .  .  -  '  1        '  investigation 

the  opinions  and  appraisements  of  any  title  insurance  or 
abstract  company,  attorneys  or  appraisers  which  may  be  pre- 
sented by  such  corporation  so  applying,  and  the  reports  of  any 
of  the  executive  officers  of  the  corporation  issuing  such  certifi- 
cates, on  any  question  of  fact  concerning  or  affecting  such 
certificates,  the  security  thereof,  or  the  financial  condition  of 
the  corporation  issuing  the  same.  In  lieu  of  or  in  addition  to 
such  opinions,  appraisements  and  reports,  the  superintendent 
of  banks  may,  if  he  deems  proper,  have  any  or  all  such  mat- 
ters passed  upon  and  certified  to  him  by  attorneys,  appraisers 
or  accountants  of  his  own  selection  at  the  expense  of  the  appli- 
cant. The  superintendent  of  banks  shall  keep  an  official  list  Superintendent 
of  all  issues  of  such  certificates  approved  by  him.  approved  certificates 

No  notes,  bonds,  or  other  securities,  the  payment  of 

,  .    ,     .  '  ,  ,        ,'  ^    "^  -     Note-.  After  Sept.  1, 

which  is  secured  by  any  mortgage  or  deed  of  trust  executed   1913.  certain  securities 
after  September  1,  1913,  shall  be  deemed  to  come  within  or  ''^^^"^'^i°'"P^'"*V., 

1  •  r      .  1  r  1        /  rx      /     X     graphs  (f),  (g)  and  (i) 

conform  to  the  requirements  of  either  of  paragraphs  (f),  (g)  must  have  been  cer- 
or  (i)  of  subdivision  three  of  this  section,  unless  such  notes,  tifiedbySupt. 
bonds  or  other  securities  shall,  in  the  manner  provided  in 
this  act,  have  been  certified  by  the  superintendent  of  banks, 
to  come  within  and  fully  conform  to  the  requirements  of 
one  or  the  other  of  said  paragraphs. 

The  legality  of  investments  heretofore  lawfully  made  pur-  Legal  investments 
suant  to  the  provisions  of  this  section,  or  of  any  law  of  this  that^re^not  affected 
state  as  it  existed  on  and  subsequent  to  July  1,  1909,  shall 
not  be  affected  by  any  amendments  to  this  section  or  this  act ; 
nor  shall  any  such  amendments  require  the  changing  of  in- 
vestments once  lawfully  made  under  this  act. 


50  CALIFOBNIA  BAITE  ACT 

Bonds  which  are        Any  bonds  authorized  by  this  section  as  a  legal  investment 

ega  ^^^™®J*^  for  savings  banks  may  be  carried  on  the  books  of  said 
bank  at  their  investment  value,  based  on  their  market  value 
at  the  time  they  were  originally  bought,  unless  the  superin- 

Supt.  may  require  tendent  of  banks  shall  require  any  or  all  of  the  bonds  which 
bank  to  write-down  ^^^  thereafter  have  a  market  value  less  than  the  original 
investment  value  to  be  written  down  to  such  new  market 
value  which  shall  be  done  gradually  if  practicable  and  in  such 
manner  as  he  may  determine ;  or  he  may,  by  a  plan  of  amorti- 
zation to  be  determined  by  him,  require  such  gradual  extinction 
of  premium  as  will  bring  such  bonds  to  par  at  maturity. 
Classes  of  bonds.         No  saviugs  bank  shall  hereafter  purchase  or  loan  money 

etc..  issued  by  any  upon  any  boud,  uotc  or  Other  evidence  of  indebtedness,  issued 

"PubUc  utility'  m       *"  It       ^  ,.  .,.,,,.  ......  ,      . 

which  savings  bank  by  any    public  Utility,    subjcct  to  the  jurisdiction,  regulation 
may  invest,  etc.  qj.  control  of  the  railroad  commission  of  this  state  under  the 
provisions  of  the  "Public  Utilities  Act,"  approved  December 
23,  1911,  unless  each  such  bond,  note  or  other  evidence  of  in- 
debtedness was  either: 

(a)     Issued  prior   to   the   taking   effect   of   the   "Public 

Utilities  Act" ;  or 
(&)     Issued  under  authority  of  the  railroad  commission, 

in  accordance  with  the  provisions  of  said  act;  or 
(c)  A   note   issued   for  a   period  not   exceeding  twelve 
months,   in   accordance   with   the  provisions   of  sub- 
division (b)  of  section  fifty-two  of  said  act. 
No  provision  of  this  act        No  provision  of  this  act,  and  no  act,  or  deed,  done  or 
c^ifomi^t^bfiiabif  performed  under  or  in  connection  therewith,  and  no  finding 
for.  or  guarantee  pay.  made  Or  Certificate  issued  under  any  provision  thereof,  shall 
Ts^lt."^S:i  be  held  or  construed  to  obligate  the  State  of  California  to 
under  this  act  by  pay,  or  be  liable  for  the  payment  of,  or  to  guarantee  in  any 
upenntendent  ^nanuer  whatsocvcr,  the  regularity  or  the  validity  of  the 
issuance  of  any  stock  or  bond  certificate,  or  bond,  note,  or 
other  evidence  of  indebtedness  certified  under  any  provision 
of  this  act,  by  the  superintendent  of  banks,  as  being  in  con- 
formity with  the  requirements  of  any  paragraph  of  subdi- 
vision three  of  this  section. 

Sec.  61a.     The  superintendent  of  banks  shall  have  power, 
when  any  issue  of  bonds  or  securities  is  presented  to  him  for 


SAVINGS  BANSS  51 

that  purpose,  to  investigate  and  ascertain  whether  such  bonds  Bonds  which  are 
or  securities  come  within  and  fully  conform  to  all  the  require-  -!^ontintfed**"** 
ments  of  paragraphs  (f),  (g),  (h)  or  (i)  of  subdivision  three 
of  section  sixty-one  of  this  act,  or  of  either  of  said  paragraphs.  Supt.  may  investigate 
He  may  also  investigate  and  ascertain  for  what  period  of  time,  ^^d  a!crrt^nTthey 
and  upon  what  conditions,  any  franchise  granted  to  or  held  by  conform  to  act 
any  corporation  issuing  any  such  bonds  or  securities  will  remain 
in  force.     The  actual  expense  of  investigating  any  issue  of  Expense  of 
bonds  or  securities  so  presented  shall  be  paid  by  the  person  or  ^°^^  ^^^ 
corporation  presenting  the  same  for  investigation,  and  the  su- 
perintendent of  banks,  before  making  such  investigation  may 
require  a  cash  deposit  of  such  amount  as  he  may  deem  neces- 
sary to  cover  such  expense.     The  superintendent  of  banks  On  questions  concem- 
may  accept  and  act  upon  the  opinions  and  appraisements  of  mayTcT^on^^eg^^* 
any  attorneys  or  appraisers  which  may  be  presented  by  such  opinions  and  appraise- 
person  or  corporation  so  applying,  and  the  reports  of  any  of  ^^puc^t?^"*^    ^ 
the  executive  officers  of  the  corporation  issuing  such  bonds 
or  securities,  on  any  question  of  fact  concerning  or  affecting 
such  bonds  or  securities,  the  security  thereof,  the  franchise 
conditions  herein  mentioned,  or  the  financial  condition  of  the 
corporation  issuing  the  same.      In  lieu  of  or  in  addition  to  Supt.  may  select 
such  opinions,  appraisements  and  reports,  the  superintendent  a^dTccoun^^t^'ar 
of  banks  may,  if  he  deems  proper,  have  any  or  all  such  matters  expense  of  applicant 
passed  upon  and  certified  to  him  by  attorneys,  appraisers  or 
accountants  of  his  own  selection  at  the  expense  of  the  applicant. 
If  the  superintendent  of  banks  shall  find  from  such  investiga-  Supt.  shau  certify 
tion  that  the  bonds  or  securities  so  presented  come  within  and  or  refuse  certificate 
fully  conform  to  all  the  requirements  of  any  of  said  paragraphs 
of  subdivision  three  of  section  sixty-one  of  this  act,  and  is 
satisfied  from  such  investigation  as  to  such  franchise  condi- 
tions, he  shall  so  certify,  otherwise  a  certificate  shall  be  refused. 
The  superintendent  of  banks  shall  keep  an  official  list  of  all  Supt.  to  keep  list  of 

.  securities  certified 

bonds  and  securities  certified  by  him. 

Sec.  62.    No  savings  bank  shall,  directly  or  indirectly,  deal  Restrictions  upon 

,      .  ,  ,  ,       .  , «_  r        savings  bank  dealing 

or  trade  m  real  or  personal  property  in  any  other  case  or  for  j^  property  and  con- 
any  other  purpose  than  is  authorized  by  this  act,  and  shall  not  tracting  debts,  etc. 
contract  any  debt  or  liability  for  any  purpose  whatever  other 
than  for  deposits,  except  as  in  this  section  provided. 


52  OALIFOBNIA  BANE  ACT 

Savings  bank  may        S'avings  banks  may  pay  regular  depositors,  when  requested 
pay  <^^^^*^^^^y  by  them,  by  draft  upon  deposits  to  the  credit  with  their  banks, 
requested  j^jj^j  charge  currcnt  rate  of  exchange  for  such  drafts. 

No  savings  bank  shall  borrow  money,  or  pledge  or  hypothe- 
Savings  bank  not  to  catc  any  of  its  sccurities,  except    to    meet    the    immediate 
^t^^^demaTdTof  ^^^n^^^^s  of  its  own  dcpositors,  and  then  only  in  pursuance  of 
depositors— except  a  rcsolution  adopted  by  a  vote  of  a  majority  of  its  board  of 
"^ubikmoLyfand  ^ircctors,  duly  entered  upon  their  minutes,  wherein  shall  be 
postal  savings  recordcd  the  ayes  and  nays  upon  each  vote ;  also  with  the 
°^°^^y^  written  approval  of  the  superintendent  of  banks,  and  he  shall 
have  the  authority  to  fix  the  amount  to  be  borrowed,  and  the 
term  and  rate  of  interest  thereon;   provided,  however,  that 
savings  banks  may,  in  the  manner  authorized  by  law,  and 
without  the  written  approval  of  the  superintendent  of  banks, 
borrow  the  public  moneys  of  the  state,  counties,  cities  and 
counties,  and  towns  and  receive  such  public  moneys  on  deposit ; 
provided,  also,  that  savings  banks  may  in  the  manner  author- 
ized by  law,  and  without  the  written  approval  of  the  superin- 
tendent of  banks,  borrow  postal  savings  moneys  of  the  United 
States,  and  receive  such  postal  savings  moneys  on  deposit. 

Savings  bank  may  Sec.  63.  S'aviugs  bauks  may  issue  general  certificates  of 
'  deposit  cleposit,  which  are  transferable,  as  in  other  cases,  by  indorse- 
ment and  delivery ;  may  issue,  when  requested  by  the  depositor, 
special  certificates,  acknowledging  the  deposit  by  the  person 
therein  named  of  a  specified  sum  of  money,  and  expressly  pro- 
viding on  the  face  of  such  certificate  that  the  sum  so  deposited 
and  therein  named  may  be  transferred  only  on  the  books  of  the 
bank;  payment  thereafter  made  by  the  bank  to  the  depositor 
named  in  such  certificate,  or  to  his  assignee  named  upon  the 
books  of  the  bank,  or  in  case  of  death,  to  the  legal  representa- 
tive of  such  person,  of  the  sum  for  which  such  special  certificate 
was  issued,  shall  discharge  the  bank  from  all  further  liability 
on  account  of  the  money  so  paid. 

Time  certificates  of        AH  time  Certificates  of  deposit,  issued  by  a  savings  bank, 

deposit  subject  to      in*  i  •  ,  ....  ,  ... 

same  conditions  as  Shall   DC  subjcct  to  the  Same  limitations  and  conditions   as 
other  deposits,  etc.  applied  to  Other  deposits,  and  notice  thereof  shall  be  given 
by  the  words  "Subject  to  conditions  of  agreement  with  depos- 
itors" printed  on  the  face  of  the  certificate  issued. 


SAVINaS  BANES  53 

Sec.  64.  Each  savings  bank  must  prescribe  by  its  by-laws,  Savings  bank  to  pre- 
or  by  contract  with  its  depositors,  the  time  and  conditions  on  or'by  contra^rw 
which  repayment  is  to  be  made  to  depositors,  except  as  in  this  ^"^^  conditions  of 

^  ^  repayment  to 

act  otherwise  provided.     In  all  cases  the  by-laws  or  contracts  depositor 
shall  provide  that  notice  of  at  least  thirty  days  may,  at  the  Notice  of  at  least 
option  of  any  such  bank,  be  required  to  be  given  of  intention  to  ^f Sik Tbe*  ZtT 
withdraw  any  deposit  or  part  thereof,  but  whenever  there  is  by  depositor 
any  call  by  depositors   for  repayment  of  a  greater  amount 
than  the  bank  may  have  disposable  for  that  purpose,  the  di- 
rectors or  officers  thereof  must  not  make  any  new  loan  or 
investment  of  the  funds  of  the  depositors  or  of  earnings  there- 
of until  such  excess  of  call  has  ceased.    The  directors  of  any 
such  bank  having  no  capital  stock  shall,  before  the  declaration 
of  any  dividend,  carry  at  least  one-tenth  part  of  the  net  profits 
of  such  bank,  for  the  preceding  half  year,  or  for  the  period 
covered  by  said  dividend,  to  its  reserve  fund.    Subject  to  the 
provisions  of  section  nineteen  of  this  act,  any  losses  sustained 
by  any  such  bank  may  be  charged  to  and  paid  out  of  its  reserve 
fund.     A  larger  reserve  fund  may  be  created  and  nothing 
herein  contained  shall  be  construed  as  prohibitory  thereof. 
The  assets  of  any  such  bank  are  a  security  to  its  depositors. 
Any  such  bank  organized  without  capital  stock,  may  provide  Savings  bank  without 
by  its  by-laws  for  the  disposal  of  any  amount  in  its  reserve  ca^^tl^tt^- 
fund  in  excess  of  the  amount  required  by  section  nineteen  of  tenth  profits  to 
this  act  and  may  also  provide  for  final  disposal  upon  the  dis-  Dir^lion  of  such 
solution  of  the  bank  of  its  reserve  fund  or  the  balance  thereof  reserve 
remaining  after  payment  of  any  losses  of  such  bank. 

Sec.  65.  No  loan  shall  be  made,  directly  or  indirectly,  to  Savings  bank  shau 
any  director  or  officer  of  any  savings  bank  by  such  bank,  or  doctor  or  officer, 
on  the  endorsement,  surety  or  guaranty  of  any  such  officer  or  °^  ^p°"  ^^  endorse- 

j .        ^  ^11  11  .         .       ment,  etc.,  except  may 

director,  except  that  loans  may  be  made  to  any  corporation  m  loan  to  corporation 
which  any  director  or  officer  of  such  savings  bank  may  own  or  in  which  director  or 

1      t  1  •  •  1  r     1  <•  1  1        .  officer  holds 

hold  a  minority  number  of  shares  of  stock,  upon  authonza-  minority  stock 
tion  of  a  majority  of  all  the  directors  of  such  savings  bank 
and  the  affirmative  vote  of  all  directors  of  such  savings  bank 
present  at  the  meeting  authorizing  such  loan;  provided,  how- 
eveVy  that  such  loan  shall  in  all  other  respects  conform  to  and 
comply  with  all  other  provisions  of  this  act.    Such  interested 


54  CALIFOENIA  BANK  ACT 

Loans— continued  director  or  officer  shall  not  vote  or  participate  in  any  manner 
Interested  director  in  the  action  of  the  board  on  such  loan.    Such  authorization 
not  to  act  on  such  ^j^^jj  ^^  entered  upon  the  records  or  minutes  of  such  savings 
Facts  concerning  bank.     The   fact   of   making   such   loan,   the   names   of   the 
^'^po^toSupt'  directors  authorizing  such  loan,  the  corporate  name  of  the 
borrower,  the  name  of  each  director  or  officer  of  such  bank 
who  is  a  member,  stockholder,  or  director  of  the  corporation 
to  which  such  loan  is  made,  the  amount  of  such  loan,  the 
rate  of  interest  thereon,  the  time  when  the  loan  will  become 
due,  the  amount,  character  and  value  of  security  given  there- 
for and  the  fact  of  payment,  when  made,  shall  be  forthwith 
reported   in   writing  by  the   cashier  or  secretary  of  such 
savings  bank  to  the  superintendent  of  banks. 

^TJS'to  a^nTor        ^  ^^^"  ^^^  ^  ^^^^  ^^  ^"^  ^&^"*  ^^  employee,  other  than 

employee  an  officcr  Or  dircctor,  of  any  savings  bank  by  such  bank  upon 

authorization  of  a  majority  of  all  the  directors  of  such  savings 

bank  and  an  affirmative  vote  of  all  directors  of  such  savings 

bank  present  at  the  meeting  authorizing  such  loan;  provided, 

Requirements  however,   that   such   loan   shall   in   all   respects    conform   to 

and   comply   with   all   other   provisions   of   this    act.      Such 

authorization    shall  be  entered  upon  the  records  or  minutes 

Facts  concerning  of  such  savings  bank.     The  fact  of  making  such  loan,  the 

reported°to  Supt!  namcs     of     the     directors     authorizing     such     loan,     the 

name  of  the  borrower,  the  nature  of  his  employment,  the 

amount  of  sudh  loan,  the  rate  of  interest  thereon,  the  time 

when  the  loan  will  become  due,  the  amount,  character  and 

value  of  the  security  given  therefor,  and  the  fact  of  payment, 

when  made,  shall  be  forthwith  reported  in  writing  by  the 

cashier  or  secretary  of  such  savings  bank  to  the  superintendent 

of  banks.    Any  officer  or  director  of  any  savings  bank,  who 

knowingly  procures  a  loan  from  such  savings  bank,  contrary 

to  the  provisions  of  this  section,  shall  be  guilty  of  a  felony. 

Violations  of  section  jj^  ^^g^  q£  ^j^g  neglect  or  failure  of  the  secretary  or  cashier 

of  any  such  bank,  to  report  to  the  superintendent  of  banks, 

as  herein  provided,  any  of  the  facts  so  required  to  be  reported. 

Penalties  the  bank  shall  be  liable  therefor  and  shall  forfeit  to  the  people 

of  the  State  of  California  twenty-five  dollars  per  day  for  each 

day,  or  part  thereof,  during  which  such  neglect  or  failure 

continues. 


SAVINGS  BANKS  55 

Sec.  66.     No  savings  bank  shall  hereafter  make  any  loans  Loans— continued 
to   any   person,    firm,   co-partnership  or   corporation   to   an 
amount  exceeding  fifty  per  centum  of  the  actual  paid  up  capi-  Savings  bank  not  to 
tal  stock  and  surplus  of  such  bank,  or  in  the  case  of  a  bank  person,  etc.,  exceed- 
orsfanized  without  capital  stock,  to  an  amount  exceeding  fifty  ingso%paidup 

.  capital  and  surplus 

per  centum  of  the  reserve  fund  of  such  bank;  provided,  how- 
ever, that  any  savings  bank  having  a  paid-up  capital  and  sur- 
plus of  less  than  fifty  thousand  dollars,  but  not  less  than  twenty-  Exceptions  to 
five  thousand  dollars,  may  make  any  such  loan  on  real  estate  foregoing 
security  to   an  amount  not  exceeding  twenty-five  thousand 
dollars ;  and  provided  further,  that  any  savings  bank  having  a 
paid-up  capital  and  surplus  of  less  than  twenty-five  thousand 
dollars  may  make  any  such  loan  on  real  estate  security  to  an 
amount  not  exceeding  its  paid  up  capital  and  surplus,  if  each 
such  loan  in  all  other  respects  conforms  to  the  provisions  of 
this  act.     The  renewal  or  extension  of  any  loan  heretofore  Renewal  or  extension 
legally  made  by  any  savings  bank  shall  not  be  construed  to  be  °^^^  heretofore 
a  "loan  hereafter  made"  within  the  meaning  of  the  provisions 
of  this  section.     The  legality  of  investments  heretofore  law- 
fully made  pursuant  to  the  provisions  of  this  act  as  it  existed 
on  and  subsequent  to  July  1,  1909,  shall  not  be  affected  by 
the  provisions  of  this  section.    For  the  purposes  of  this  section  Endorser  or  guarantor 
an  endorser  or  guarantor  shall  be  deemed  to  be  a  borrower.         ^^^"^^^  ^^"•^'^^^ 

Sec.  67.     1.     No  savings  bank  shall  loan  money  except  on  Savings  bank  to  loan 
adequate  security  of  real  or  personal  property,  and  no  such  security  for 'ikL^t^ed 
loan  shall  be  made  for  a  period  longer  than  ten  years;  pro-  period 
vided,  that  no  such  loan  shall  be  made  on  unsecured  notes. 

2.  No  savings  bank  shall  invest  or  loan  more  than  five  per  Restrictions  on  in 
centum  of  its  assets  on  any  one  bond  issue,  except  bonds  of 
the  United  States,  of  the  State  of  California,  bonds  for  which 
the  faith  and  credit  of  the  United  States  or  of  the  State  of 
California  are  pledged,  or  bonds  of  any  county,  city  and  county, 

city  or  school  district  in  this  state,  or  bonds  of  any  irrigation 
district  such  as  are  legal  for  investment  by  savings  banks. 

3.  No  savings  bank  shall  loan  money:  Loans  on  various 

.f.^,  1        /    \      classes  of  bonds,  etc. — 

(a)  On  bonds  of  the  character  specified  m  paragraphs  (a),  margin  of  security 
(b),    (c),  and    (d)   of  subdivision  three  of  section  required 
sixty-one  of  this  act,  unless  such  bonds  shall  have  a 


vestment  in  or  loan 
on  any  one  bond  issue 


56 


CALIFORNIA  BAITK  ACT 


Loans — continued 


Loans  by  savings 
banks  on  various 

classes  of  bonds,  etc. 

— margin  of  security 
required 


Real  estate  loans: 
To  be  first  liens 

Not  to  exceed  60% 
of  market  value 


When  bank  may 
take  second  lien 


First  mortgage 
real  estate  bonds 


market  value  at  least  ten  per  centum  in  excess  of  the 
amount  loaned  thereon;  or, 

(b)  On  bonds  of  the  character  specified  in  paragraphs  (e), 
(f)  and  (g)  or  on  bonds  or  notes  of  the  character 
specified  in  paragraph  (i)  of  subdivision  three  of  sec- 
tion sixty-one  of  this  act,  unless  such  bonds  or  notes 
shall  have  a  market  value  at  least  fifteen  per  centum 
in  excess  of  the  amount  loaned  thereon ;  or, 

(c)  On  bonds  legal  for  investment  by  savings  banks  in  the 
states  of  New  York  or  Massachusetts,  unless  such 
bonds  shall  have  a  market  value  at  least  fifteen  per 
centum  in  excess  of  the  amount  loaned  thereon;  or, 

(d)  On  personal  property  unless  such  personal  property 
shall  have  a  market  value  at  least  fifty  per  centum  in 
excess  of  the  amount  loaned  thereon ;  or, 

(e)  On  other  bonds,  or  on  the  capital  stock  of  any  corpora- 
tion, unless  such  bonds  or  stock  shall  have  a  market 
value  at  least  fifty  per  centum  in  excess  of  the  amount 
loaned  thereon;  provided,  however,  that  no  loan  shall 
be  made  upon  the  capital  stock  of  any  bank  unless 
such  bank  has  been  in  existence  at  least  two  years  and 
has  earned  and  paid  a  dividend  on  its  capital  stock. 

4.  No  savings  bank  shall  make  any  loan  on  the  security 
of  real  estate,  except  it  be  a  first  lien,  and  in  no  event  to  ex- 
ceed sixty  per  centum  of  the  market  value  of  any  real  estate 
taken  as  security  except  for  the  purpose  of  facilitating  the  sale 
of  property  owned  by  such  savings  bank;  provided,  that  a 
second  lien  may  be  accepted  to  secure  the  repayment  of  a  debt 
previously  contracted  in  good  faith;  and,  provided,  also,  that 
any  savings  bank  holding  a  first  mortgage  or  deed  of  trust  on 
real  estate  may  take  or  purchase  and  hold  another  and  imme- 
diately subsequent  mortgage  or  deed  of  trust  thereon,  but  all 
such  loans  shall  not  exceed  in  the  aggregate  sixty  per  centum 
of  the  market  value  of  the  real  estate  securing  the  same; 
provided,  further,  that  a  savings  bank  may  loan  not  to  exceed 
ninety  per  centum  of  the  face  value  of  a  note  or  bond  secured 
by  a  first  mortgage  or  deed  of  trust  on  real  estate,  but  in  no 
event  shall  any  such  loan  exceed  ninety  per  centum  of  sixty 


SAVINGS  BANKS  57 

per  centum  of  the  market  value  of  the  real  estate  covered  by  Loans— continued 
said  mortgage  or  deed  of  trust. 

5.     No  savings  bank  shall  purchase,  invest  or  loan  its  cap-  Savings  bank  not  to 

♦  .    1  1  .1  r    -.        t  • .  .        f   invest  in  or  loan  on 

ital,  surplus  or  the  money  of  its  depositors,  or  any  part  of  mining  stock 
either,  in  mining  shares  or  stock.    Any  president  or  manag- 
ing officer  who  knowingly   consents   to  a  violation  of  any  violation  of  Sec.  67 
provision  of  this  section  shall  be  guilty  of  a  felony.  Jie^y^  °  ^^'^ 

Sec.  68.     Every  savings  bank  or  savings  department  of  Reserve  required  of 
a  bank,  shall  at  all  times  maintain  a  lawful  money  reserve  ^^^^°^^^^^^- 
equivalent  to  four  per  centum  of  the  aggregate  amount  of  4%  of  deposits 
its  deposits ;  one  half  of  such  lawful  money  reserve  shall  be 
kept  on  hand  in  lawful  money  of  the  United  States  or  gold  How  and  where  to 
certificates  or  silver  certificates  of  the  United  States,  and  one- 
half  may  consist  of  bonds  of  the  United  States  or  of  lawful 
money  of  the  United  States  or  gold  certificates  or  silver  cer- 
tificates   of    the    United    States,    on    hand    or    on    deposit 
subject     to     call    with  any  reserve    bank    provided    for    in 
section  twenty  of  this  act;  provided ,  however,  that  no  sav- 
ings bank  or  savings  department  shall  be  required  to  main- 
tain in  its  own  keeping  a  lawful  money  reserve  in  excess  of 
four  hundred  thousand  dollars,  and  when  such  lawful  money 
reserve  in  its  own  keeping  reaches  that  amount,  the  balance 
of  cash  necessary  to  make  up  the  four  per  centum  may  be 
kept  on  deposit  subject  to  call  with  any  reserve  bank  pro- 
vided for  in  section  twenty  of  this  act.    No  new  loan  shall  No  new  loans  during 

i_  jj-  1    r    •  •iiiri  deficiency  in  reserve 

be  made  during  any  deficiency  in  the  lawful  money  reserve. 
Deposits  with  any  commercial  bank,  or  commercial  depart- 
ment of  a  bank,  on  open  account,  to  facilitate  business  trans- 
actions, as  provided  in  this  section,  shall  be  permitted,  and 
shall  not  be  construed  as  loans.  Not  more  than  five  per  Restrictionson 
centum  of  the  deposits  of  any  savings  bank  shall  be  deposited  fromtl^blnk^ 
with  any  one  bank,  except  with  the  consent  of  the  superintend- 
ent of  banks.  Not  more  than  fifteen  per  centum  of  the  deposits 
of  any  savings  bank  shall  be  deposited  with  all  other  banks, 
except  with  the  consent  of  the  superintendent  of  banks. 
No  savings  bank  or  savings  department  shall  receive 
deposits  of  other  banks  other  than  savings  deposits  and 
such  deposits  shall  not  be  treated  or  considered  as  a  part 


58  OALIFOBNIA  BANE  ACT 

of  the  lawful  money    reserve    of    such    depositing    bank; 
provided,  that  the  sum  so  deposited  shall  not  exceed  ten  thou- 
sand dollars. 
Public  administrator        Sec.  68^.    Where  a  dcccdent,  at  the  time  of  his  or  her 
decedent  to  remain  death,  left  moneys  on  deposit  with  a  savings  bank,  it  shall  be 
in  savings  bank  lawful  for  any  public  administrator,  who  shall  become  the 

where  deposited        -      .    .  -     .  ..  «      *  . 

admmistrator  of  the  estate,  to  allow  such  deposit  to  remam  m 
said  savings  bank,  and  also,  it  shall  be  lawful  for  him  to  deposit 
therein  to  the  account  of  said  decedent,  any  and  all  moneys 
of  said  estate  not  required  for  the  current  expenses  of  admin- 
Effect  of  such  deposit  istration.     Such  deposit,  whether  made  by  the  decedent  or  a 
public   administrator,   shall   relieve   the   public   administrator 
from  depositing  the  same  with  the  county  treasurer.    Moneys 
so  deposited,  whether  by  the  decedent  or  by  a  public  adminis- 
Method  of  withdrawal  trator,   may  be   drawn  upon   demand  without  notice,  upon 
the  order  of  said  administrator,  countersigned  by  a  judge  of 
a  superior  court,  when  required  for  the  purpose  of  administra- 
tion or  otherwise. 
Savings  banks  to        Sec.  69.     Every  savings  bank,  and  the  business  of  every 

conform  to  this  act  .  ,  .  «  <        i  «  «  « 

savmgs  department  of  every  other  bank,  must  be  conducted 
under  and  in  accordance  with  the  provisions  of  this  act. 


ARTICLE  III. 

COMMEBCIAL  BANES. 


Loans        Sec.  80.     No  commercial  bank  shall  make  any  loans  to 

Percentages  of  paid  any    pcrson,    firm,    co-partnership    or    corporation,    to    an 

"^hfs^thtt^mtTe  ^^^^^^  exceeding  the  following  percentages  of  its  capital 

loaned  by  commer-  stock  actually  paid  in  and  surplus : 

"*^  ^^Wower'-         ^*     '^^^  P^^  centum  without  security,  except  where  such 

(1)  10%  without  capital  stock  and  surplus  is  less  than  twenty-five  thousand 

(note  except^^s)  ^ol^ars,  in  which  event  an  amount  not  to  exceed  twenty  per 

centum  of  such  capital  stock  and  surplus  may  be  loaned 

without  security,  and  where  such  capital  stock  and  surplus 

is  greater  than  twenty-five  thousand  dollars  and  does  not 

exceed   fifty  thousand   dollars,   a   sum  not  exceeding  five 

thousand  dollars  may  be  loaned  without  security.    Nothing 


COMMEBCIAL  BANES  59 

herein  shall  prohibit  any  commercial  bank  from  taking  or  Loan»-continued 

receiving  any  kind,  character  or  amount  of  security  whatso-  ^"y  security  may  be 

ever,  either  real  or  personal,  for  the  protection  of  any  loan  *^^^"  ^°^  ^"^^  i°*°s 
made  under  the  provisions  of  this  subdivision,  but  no  such 

loan  or  any  part  thereof  shall  be  considered  or  construed  as  a  When  not  construed 

secured  loan  unless  the  whole  thereof  is  loaned  upon  security  ^^  ^^""^^  ^°^" 
worth  at  least  fifteen  per  centum  more  than  the  amount  of 
such   loan;   or, 

2.  Fifteen  per  centum,  in  addition  to  the  amount  that  (2)  is  %  (in  addition 
may  be  loaned  under  the  provisions  of  subdivision  one  of  this  rn^'iubdi^^s'ion  i) 
section,  upon  security  worth  at  least  fifteen  per  centum  more  "po^  security  exceed- 

11  ,.11  1  ^^8  loan  by  15  % 

than  the  amount  of  such  loan  so  secured;  provided,  however, 
that  a  separate  note  or  notes  shall  be  taken  for  the  unsecured  Separate  notes  for 
loans  and  a  separate  note  or  notes  shall  be  taken  for  the  secured  'oans''^  ^""^  unsecured 
loans,  and  the  secured  and  unsecured  loans  shall  not  be  com- 
bined in  any  way  within  one  note,  or  notes ;  or, 

3.  Twenty-five  per  centum  upon  security  worth  at  least  (3)  25%  upon  security 
fifteen  per  centum  more  than  the  amount  of  its  loans  so  se-  (notfproUT^'' ^^^" 
cured;  provided,  however,  that  when  secured  loans  to  this 

amount  or  any  amount  in  excess  of  fifteen  per  centum  are 
made,  then  no  unsecured  loans  shall  be  permitted  in  addition 
to  such  secured  loans. 

A  commercial  bank  may  buy  from,  or  discount  for,  any  Commercial  bank  may 
person,  firm,  co-partnership  or  corporation,  or  loan  upon  bills  p^^^hase  or  loan  on 
of  lading  or  bills  of  exchange  drawn  in  good  faith  against     ^  ^  °    ^    ^'^^' 
actual  existing  value  an  amount  not  exceeding  seventy-five  per 
centum  of  the  paid  up  capital  and  surplus  of  such  bank;  and 
may  also  buy  from  or  discount  for  any  person,  firm,  co-partner-  May  purchase  or 
ship   or  corporation,   commercial  or  business  paper  actually  discount  commercial 

,11  -  ,.  .  paper,  etc. 

owned  by  the  person,  firm,  co-partnership  or  corporation  nego- 
tiating the  same,  an  amount  not  exceeding  twenty-five  per 
centum  of  the  paid  up  capital  and  surplus  of  such  bank;  but 
the  discount  of  bills  of  lading  or  bills  of  exchange  drawn 
in  good  faith  against  actual  existing  value,  and  the  discount  Such  discount  not 
of  commercial  or  business  paper  actually  owned  by  the  person,  bo^o^ed*^  "'°''^^ 
firm,  co-partnership  or  corporation  negotiating  the  same,  shall 
not  be  considered  as  money  borrowed  by  the  person,  firm,  co- 
partnership or  corporation  selling  or  discounting  the  same. 


60  CALIFORNIA  BANK  ACT 

Loans— continued         Sec.  81.    No  loan  shall  be  made  by  any  commercial  bank 
upon  the  securities  of  one  or  more  corporations,  the  payment 
Loans  upon  corporate  of  which  is  Undertaken,  in  whole  or  in  part,  severally,  but  not 
^^^i^^^onditions  jointly,  by  two  or  more  individuals,  firms,  or  corporations: 

specified  (^)  If  the  borrowcrs  or  underwriters  be  obligated  abso- 
lutely or  contingently  to  purchase  the  securities,  or  any  of 
them,  collateral  to  such  loan,  unless  the  borrowers  or  under- 
writers shall  have  paid  on  account  of  the  purchase  of  such 
securities  an  amount  in  cash,  or  its  equivalent,  equal  to  at 
least  twenty-five  per  centum  of  the  several  amounts  for  which 
they  remain  obligated  in  completing  the  purchase  of  such 
securities ; 

(b)  If  the  commercial  bank  making  such  loan  be  liable, 
directly  or  indirectly,  or  contingently,  for  the  repayment  of 
such  loan  or  any  part  thereof ; 

(c)  If  its  term,  including  any  renewal  thereof  by  agree- 
ment, express  or  implied,  exceed  the  period  of  one  year ; 

{d)  Or  to  an  amount  under  any  circumstances  in  excess  of 
twenty-five  per  centum  of  the  capital  and  surplus  of  the  com- 
mercial bank  making  such  loan. 

Paid  up  capital        Sec.  82.     Every    commercial    bank    hereafter    organized 

requirements:    ^^^^  j^^^^  ^^j^  ^^  j^  ^^^j^  ^  Capital  StOCk  of  nOt  IcSS  than, 

Population  not  over         (^j)    Twcuty-fivc  thousaud  dollars  if  its  principal  place 
of  business  is  located  in  any  locality  the  population  of  which 
does  not  exceed  five  thousand  persons ; 
5.000  to  25.000         (b)    Fifty  thousand  dollars  if  its  principal  place  of  busi- 

pop  ation.  .  ^^^^  .^  located  in  any  city  the  population  of  which  is  more 
than  five  thousand  persons  but  does  not  exceed  twenty-five 
thousand  persons ; 

J^o^,ZZ  (^)  One  hundred  thousand  dollars  if  its  principal  place 
of  business  is  located  in  any  city  the  population  of  which 
is  more  than  twenty-five  thousand  persons  but  does  not  ex- 
ceed one  hundred  thousand  persons; 

poplX%2~Z  ('').  Two  hundred  thousand  dollars  if  its  principal  place 
of  business  is  located  in  any  city  the  population  of  which 
is  more  than  one  hundred  thousand  persons  but  does  not  ex- 
ceed two  hundred  thousand  persons ; 


COMMEBCIAL  BANKS  61 

(e)    Three  hundred  thousand  dollars  if  its  principal  place  Population  exceeding 

of  business  is  located  in  any  city  the  population  of  which  is  2oo.ooo.-$3oo.ooo 
more  than  two  hundred  thousand  persons. 

The  foregoing  classification  shall  not  apply  to  any  com-  Foregoing  ciassifica- 

mercial  bank  already  in  existence  which  has  received  its  nOTap°pii"ab°e^o*^^^ 

certificate  to  do  a  banking  business  from  the  superintendent  ^^nks  included  by 

annexation  in 

of  banks ;  nor  to  any  bank  the  location  of  which  shall  have  larger  city 
been    included    by    annexation  or    consolidation    within    the 
limits  of  a  city  of  a  class  requiring  a  larger  capitalization, 
but  no  bank  thus  excepted  shall  be  permitted  to  establish 
any  new  branch  office  as  provided  in  section  nine  of  this 
act  or  to  remove  its  place  of  business  from  the  original  limits 
of  the  city  or  township  wherein  it  was  located  prior  to  such 
annexation  or  consolidation  until  it  shall  have  the  capital 
required  of  banks  in  such  city  not  within  said  exception. 
Such  excepted  banks  may  not  in  any  case  decrease  their  Restrictions  as  to 
capital  stock  but  may  increase  the  same  in  the  manner  pro-  e*<^ep*e<i  ^^^^ 
vided  by  law  to  an  amount  either  greater  or  less  than  that 
required  of  banks  in  such  city  not  within  said  exception ;  pro- 
vided, that  nothing  herein  shall  be  construed  to  affect  the  pro-  See  19  and  Sec.  23 
visions  of  section  nineteen  of  this  act  relative  to  the  proportion  "°  ^  ®  ®    ^  ®^- 
of  capital  and  surplus  to  deposits  or  of  section  twenty-three 
of  this  act  relative  to  the  capital  stock  required  of  banks 
doing  a   departmental   business.     The   provisions   of  section  How  population  is 
twenty-three  of  this  act,  as  to  population,  shall  apply  to  any  '^^^^"^^^^^ 
bank  organized  under  the  provisions  of  this  section. 

Sec.  83.     No   loan   shall   be   made,    directly   or   indirect-  Commercial  bank  not 

t,  /v  r  '1111  lit       to  loan  to  its  officers— 

ly,  to  any  officer  of  any  commercial  bank  by  such  bank,  but  may  loan  to  di- 
or  on  the  endorsement,  surety,  or  guaranty  of  any  such  rector,  etc.  (or  to  firm. 
officer,  except  as  hereinafter  provided  in  this  section.    Loans  director,  etc.,  is  con- 
to  any  director,  agent,  or  other  employee,  or  to  any  firm,  nected  as  specified), 
co-partnership  or  corporation  of  which  any  director,  officer,  endorsement,  etc.,  of 
agent  or  other  employee  is  a  member,  stockholder,  director,  director  (not  officer) 

,  -  etc., — in  manner 

agent  or  other  employee,  or  to  any  person,  firm,  co-partner-  specified 
ship  or  corporation  on  the  endorsement,  surety,  or  guaranty 
of  any  such  director  other  than  an  officer,  agent  or  other 
employee,  can  be  made  by  any  commercial  bank  only  on 
authorization  of,  or  confirmation  within  thirty  days  after  mak- 


62  CALIFOBNIA  BANE  ACT 

Loans— continued  ing  such  loan,  by  a  majority  of  all  the  directors  of  such  bank  and 

the  affirmative  vote  of  all  directors  of  such  bank  present  at  the 

meeting  authorizing  or  confirming  such  loan.    Such  interested 

Interested  director  dircctor  shall  not  vote  or  participate  in  any  manner  in  the 

action  of  the  board  on  such  loan.    The  board  of  directors  of 

Credit  of  director,  any  such  bank  may  fix  the  total  amount  of  credit  that  may 

?n  wtdch^ertor!  ^^  ^^^  ^"^  ^^"^^  during  the  twelve  months  next  succeeding 

officer,  etc..  is  in-  bc  givcn  to  any  director,  agent,  or  other  employee,  or  to 

terested)^tobefi^xed  ^^^    ^^^.^^^    co-partncrship    or    corporation    in    which    any 

directors  director,   officer,   agent,  or  other  employee  is  a  member, 

stockholder,  director,  agent  or  other  employee,  and  any  or 

all  loans  made  within  or  up  to  the  total  amount  of  such 

authorized  credit  may  at    any    time    during    said    twelve 

months,  be  renewed  from  time  to  time,  in  whole  or  in  part, 

by  the  officers  of  the  bank  without  any  further  vote  or 

action  on  the  part  of  the  board  of  directors.     Each  such 

authorization  shall  be  entered  upon  the  records  or  minutes 

of  said  bank.    No  director  shall  vote  or  participate  in  any 

manner  in  such  action  of  the  board  fixing  the  total  amount 

of  credit  that  may  at  any  one  time  be  given  to  himself  or 

to  any  firm,  co-partnership  or  corporation  in  which  he  is  a 

member,   stockholder,   director,   agent  or  other  employee. 

Facts  concerning  fhe    fact    of    making    such    loan,    the    names    of    the    di- 

such  loan  to  be  re-  ,        .    .  ,       ,  ,  -       ,  , . 

ported  to  Supt.  fectors  authonzmg  such  loan,  the  name  of  the  director, 
agent,  or  employee,  obtaining  such  loan,  or  the  name  of 
the  firm,  co-partnership  or  corporation  in  which  such 
director,  officer,  agent,  or  employee  is  interested,  obtaining 
such  loan,  the  amount  of  such  loan,  the  rate  of  interest 
thereon,  the  time  when  the  loan  will  become  due,  the 
amount,  character  and  value  of  security  given  therefor,  if 
any,  and  the  fact  of  payment  when  made,  shall  be  forthwith 
reported  in  writing  by  the  cashier  or  secretary  of  such  bank 
to  the  superintendent  of  banks.  In  case  of  a  loan  so  made 
without  the  previous  authorization  of  the  directors,  the  action 
of  the  board  of  directors,  in  confirming  or  refusing  to  confirm 
such  loan  within  thirty  days  thereafter,  shall  be  reported  in 
Violation  made  felony  the  Same  manner.  Any  officer,  director,  agent,  or  employee 
of  a  commercial  bank,  who  knowingly  procures  a  loan  from 
such  commercial  bank  contrary  to  the  provisions  of  this  section, 


TEUST  COMPANIES  63 

shall  be  guilty  of  a  felony.    In  case  of  the  neglect  or  failure  Penalty  for  failure 

of  the  secretary  or  cashier  of  any  such  bank,  to  report  to  the  *°  ^®p°^ 

superintendent  of  banks,  as  herein  provided,  any  of  the  facts 

so  required  to  be  reported,  the  bank  shall  be  liable  therefor  and 

shall  forfeit  to  the  people  of  the  State  of  California  twenty-five 

dollars  per  day  for  each  day,  or  part  thereof,  during  which 

such  neglect  or  failure  continues. 

Sec.  84.  No  commercial  bank  shall  invest  an  amount  Limited  investment 
exceeding  its  paid  up  capital  and  surplus  in  the  lot  and  build-  l^^^^^^^"^ 
ing  in  which  the  business  of  the  bank  is  carried  on,  furniture 
and  fixtures,  vaults  and  safe  deposit  vaults  and  boxes  neces- 
sary or  proper  to  carry  on  its  banking  business ;  and  hereafter 
the  authority  of  a  two-thirds  vote  of  all  the  directors  shall  be 
necessary  to  authorize  the  purchase  of  such  lot  and  building 
or  the  construction  of  such  building. 


ARTICLE  IV. 

TEUST  COMPANIES. 


Sec.  90.  Any  corporation  which  has  been  or  shall  be  what  constitutes  a 
incorporated  under  the  general  corporation  laws  of  this  state,  ^^^^^°^p^^ 
which  is  authorized  by  its  articles  of  incorporation  to  act 
as  executor,  administrator,  guardian  of  estates,  assignee, 
receiver,  depositary  or  trustee,  under  appointment  of  any 
court  or  by  authority  of  any  law  of  this  state,  or  as  trustee  for 
any  purpose  permitted  by  law,  which  has  its  principal  place 
of  business  in  a  city  in  which  the  population  does  not  exceed 
one  hundred  thousand  persons  and  which  has  a  capital  of  not 
less  than  one  hundred  thousand  dollars  actually  paid  in,  in  cash, 
assigned  to  or  available  for  the  purpose  of  conducting  business 
in  any  such  capacity,  or  trust  business  of  any  character  per- 
mitted by  law,  and  which  has  made  with  the  state  treasurer 
the  deposit  of  money  or  securities  of  the  character  and  in  the 
amount  required  by  the  terms  of  section  ninety-six  of  this  act, 
and  which  has  received  from  the  superintendent  of  banks 
the  certificate  of  authority  required  by  the  terms  of  section  one 
hundred  and  twenty-seven  of  this  act,  to  transact  such  busi- 
ness, and  any  corporation  which  has  been  or  shall  be  incorpo- 


64  CALIFOBNIA  BANE  ACT 

Powers  conferred  on  rated  undcr  the  general  corporation  laws  of  this  state,  which  is 
trust  company  ^^^j^Qj-j^ed  by  its  articles  of  incorporation  to  act  as  executor, 
administrator,  guardian  of  estates,  assignee,  receiver,  deposi- 
tary or  trustee,  under  appointment  of  any  court  or  by  author- 
ity of  any  law  of  this  state,  or  as  trustee  for  any  purpose  per- 
mitted by  law,  which  has  its  principal  place  of  business  in  a 
city  in  which  the  population  exceeds  one  hundred  thousand 
persons  and  which  has  a  capital  of  at  least  two  hundred  thou- 
sand dollars  actually  paid  in,  in  cash,  assigned  to  or  available 
for  the  purpose  of  conducting  business  in  any  such  capacity, 
or  trust  business  of  any  character  permitted  by  law,  and  which 
has  made  with  the  state  treasurer  the  deposit  of  money  or 
securities  of  the  character  and  in  the  amount  required  by  the 
terms  of  section  ninety-six  of  this  act,  and  which  has  received 
from  the  superintendent  of  banks  the  certificate  of  authority 
required  by  the  terms  of  section  one  hundred  twenty-seven 
of  this  act,  to  transact  such  business,  may  act,  or  may  be 
appointed  by  any  court  to  act,  in  any  such  capacity  in  like 
manner  as  an  individual  and  when  so  qualified  shall  be  known 
as  a  trust  company.  Any  such  trust  company  may,  as  pro- 
vided in  this  act,  accept  or  receive  any  deposit  of  money  or 
personal  property  authorized,  directed  or  permitted  to  be  made 
with  any  such  corporation  by  any  court  or  law  of  this  state, 
and  may  accept  and  execute  any  trust  provided  for  in  this 
act,  or  permitted  by  any  law  of  this  state,  to  be  taken,  accepted 

Trust  company  shall  or  cxccutcd  by  an  individual.  Any  such  trust  company,  if 
apportion  capital  and  located  in  a  city  the  population  of  which  does  not  exceed  one 

surplus  as  security  J  f    f 

for  performance  of  hundred  thousaud  pcrsous  must  segregate  that  portion  of  its 
^"""pubu^lmsts^  capital  and  surplus  assigned  to  or  available  for  its  trust  busi- 
respectiveiy  ucss  and  must  apportion  and  set  aside  at  least  fifty  thousand 
Apportionment  in  dollars  of  such  paid-up  Capital  as  security  for  the  faithful 
performance  and  execution  of  all  private  trusts  accepted  by  it 
and  must  also  apportion  and  set  aside  at  least  fifty  thousand  dol- 
lars of  such  paid-up  capital  as  security  for  the  faithful  per- 
formance and  execution  of  all  court  trusts  accepted  by  it  and 
whenever  such  trust  company  shall,  under  the  provisions  of 
sections  96  and  98  of  this  act,  be  required  to  make  the  first 
additional  deposit  of  securities  with  the  state  treasurer,  such 
trust  company  must  also  apportion  and  set  aside  an  additional 


city  of  less  than 
100.000  population 


TEUST  COMPANIES  65 

fifty  thousand  dollars  of  paid-up  capital  as  security  for  the 
faithful  performance  and  execution  of  all  private  trusts  ac- 
cepted by  it  and  must  also  apportion  and  set  aside  an  additional 
fifty  thousand  dollars  of  paid-up  capital  as  security  for  the 
faithful  performance  and  execution  of  all  court  trusts  accepted 
by  it,  and  any  trust  company,  if  located  in  a  city,  the  population  SimUar  apportionment 
of  which  exceeds  one  hundred  thousand  persons,  must  segre-  |f  ^tfol  popXtTon' 
gate  that  portion  of  its  capital  and  surplus  assigned  to  or  exceeding  100,000 
available  for  its  trust  business  and  must  apportion  and  set  appoSonmenf ^  *° 
aside  at  least  one  hundred  thousand  dollars  of  such  paid-up 
capital  as  security  for  the  faithful  performance  and  execution 
of  all  private  trusts  accepted  by  it  and  must  also  apportion  and 
set  aside  at  least  one  hundred  thousand  dollars  of  such  paid-up 
capital  as  security  for  the  faithful  performance  and  execution 
of  all  court  trusts  accepted  by  it;  provided,  that  no  such  trust 
company  shall  at  any  time  be  required  to  apportion  and  set 
aside  any  portion  of  its  surplus  as  security  for  the  faithful 
performance  of  such  private  trusts,  nor  shall  it  be  prohibited 
from  so  doing;  and  provided,  further,  that  the  respective 
amounts  of  capital  or  capital  and  surplus  so  apportioned  and 
set  aside  shall  be  treated  in  all  respects  as  the  separate  capital 
or  capital  and  surplus  of  each  respective  kind  or  class  of  bus- 
iness, as  though  the  same  were  conducted  by  separate  and 
distinct  corporations,  and  each  shall  be  kept,  held,  used  and 
disposed  of  wholly  for  the  exclusive  benefit,  protection  and 
security  of  the  respective  classes  of  trust  business  to  which 
the  same  were  respectively  so  apportioned  and  set  aside.  In  what  officers  author- 
all  cases  in  which  it  is  required  that  an  executor,  administra-  ized  to  mate  oath 

^  '  .  or  affidavit 

tor,    guardian    of    estates,    assignee,    receiver,    depositary   or 
trustee,     shall     qualify     by     taking     and     subscribing     an 
oath,  or  in  which  an  affidavit  is  required,  it  shall  be  a  sufficient 
qualification  by  such  corporation  if  such  oath  be  taken  and 
subscribed  or  such  affidavit  made  by  the  president,  vice-pres- 
ident, secretary,  manager,  trust  officer,  assistant  trust  officer 
or  regularly  employed  attorney  thereof,  and  such  officer  or  em-  Liability  of  such 
ployee  shall  be  liable  for  the  failure  of  such  trust  company  to  tmstcVmpany^to °' 
perform  any  of  the  duties  required  by  law  to  be  performed  by  perform  duties 
an  individual  acting  in  like  capacity  and  subject  to  like  penal- 
ties; provided,  any  such  appointment  as  guardian  shall  apply 


66  CALIFORNIA  BANK  ACT 

Trust   company  to  the  cstatc  Only,  and  not  to  the  person.    No  foreign  corpora- 
guardian  of  estate —  ,.         1    11  1  .      .     ,,  .  , 

not  of  person  tion  shall  have  or  exercise  in  this  state  the  power  to  act  as 

trustee  under  any  mortgage,  deed  of  trust,  or  other  instrument 
Foreign  corporation  sccuring  notcs  Or  bouds  issucd  by  any  corporation,  excepting 
tl^ttlttVhis'state  t^at  ^  foreign  corporation  may  be  authorized  to  act,  outside  of 
under  corporate  the  State  of  CaHfomia,  as  co-trustee  with  any  quaHfied  trust 
mortgage,  etc.  ^QYup^uj  Organized  and  doing  business  under  the  laws  of  this 
Foreign  corporation  statc,  for  the  following  purposcs  with  reference  to  bonds  se- 
nsed pTrptfes%'o  let  cured  by  mortgage  or  deed  of  trust  of  property  in  this  state, 
outside  of  state  as  and  nonc  Other : 

co-trustee  with  quali- 
fied domestic  com-  (1)   To  deliver  bonds,  and  receive  payment  therefor. 

securefby  mortgagt         ^^^  ^^  dclivcr  permanent  bonds  in  exchange  for  tempo- 
etc,  of  property  in  rary  bonds  of  the  same  issue. 

(3)  To  deliver  refunding  bonds  in  exchange  for  those  of  a 
prior  issue  or  issues. 

(4)  To  register  bonds,  or  to  exchange  registered  bonds 
for  coupon  bonds,  or  coupon  bonds  for  registered  bonds. 

(5)  To  pay  interest  on  such  bonds,  and  to  take  up  and 
cancel  coupons  representing  such  interest  payments. 

(6)  To  redeem  and  cancel  bonds  when  called  for  redemp- 
tion, or  to  pay  and  cancel  bonds  when  due. 

(7)  The  certification  of  registered  bonds  for  the  purpose 
of  exchanging  registered  bonds  for  coupon  bonds. 

Court  may  authorize         Sec.  91.     Any  court  having  jurisdiction  of  any  executor, 

fiduciTS  to°depo^s!t  administrator,   guardian,   assignee,   receiver,   depositary  or 

trust  fund  with  trust  trustcc,  upou  the  application  of  any  such  officer  or  trustee,  or 

',  subject  to 
court  order 


company,  su  ject  to  ^^^^  ^j^^  application  of  any  person  having  an  interest  in  the 


estate  or  property  administered  by  such  officer  or  trustee, 
after  such  notice  to  the  other  parties  in  interest  as  the  court 
may  direct,  and  after  a  hearing  upon  such  application,  may 
authorize  such  officer  or  trustee  to  deposit  any  moneys  then  in 
his  hands,  or  which  may  come  into  his  hands  thereafter,  until 
the  further  order  of  said  court,  with  any  such  trust  company, 
and  upon  deposit  of  such  money,  and  its  receipt  and  accept- 
ance by  such  trust  company,  the  said  officer  or  trustee  shall 
be  discharged  from  further  care  or  responsibility  therefor. 
Such  deposit  shall  be  paid  out  only  upon  the  order  of  said 
court. 


I 


TEUST  COMPANIES  67 

Sec.  92.     Any  public  administrator  may  deposit  any  or  Public  administrator 
all  moneys  of  any  estate  upon  which  he  is  administering,  not  Ss^Xhlmst*^*^ 
required  for  the  current  expenses  of  such  administration,  with   company 
any  such  trust  company  having  its  principal  place  of  business 
in  the  county,  or  city  and  county  in  which  he  is  acting  as  such 
administrator.      Any  court  having  jurisdiction  of  an  estate   Court  may  direct 
being   administered   by    a    pubHc   administrator,    miay    direct   ^^^     ^^°^** 
such    administrator    to    deposit    all    or    any    part    of    the 
moneys  of  said  estate  with  any  such  trust  company.     Such 
deposit  shall  relieve  the  public  administrator  from  depositing 
with  the  county  treasurer  the  moneys  so  deposited  with  such 
trust  company.     Moneys   so   deposited  by  a  public  adminis-   How  deposit  may  be 
trator  may  be  drawn,  upon  the  order  of  such  administrator, 
countersigned  by  a  judge  of  the  superior  court,  when  required 
for  the  purposes  of  administration,  or  otherwise. 

Sec.  93.     Any  court  having  jurisdiction  of  any  estate  in  Court  may  under 
process  of  administration,  or  any  other  proceeding,  may,  on  T^^lt'^'^Zsteo, 
application   of  any  person   interested   therein,   or  the  person  etc.,  to  deposit  trust 
who  has  been  selected  by  said  court,  or  a  judge  thereof  as  tmstcompaly^ 
executor,  administrator,  guardian,  assignee,  receiver,  deposi- 
tary or  trustee,  after  such  notice  to  the  parties  in  interest 
as  the  court  shall  direct,  or  without  notice  if  all  parties  in 
interest  consent  thereto,  and  a  hearing  on  such  application, 
order    any    executor,    administrator,    guardian,    assignee,    re- 
ceiver, depositary  or  trustee  so  selected  or  appointed,  whether 
such  person  has  duly  qualified  or  not  to  deposit  with  any  such 
trust  company,  for  safe-keeping,  such  portion  or  all  of  the 
personal  assets  of  said  estate  as  the  court  shall  deem  proper, 
and  upon  such  deposit  being  made,  the  court  shall  by  an  order  Effect  of  such  deposit 
of  record  reduce  the  bond  to  be  given  or  theretofore  given  by 
such  officer  or  trustee,  so  as  to  cover  only  the  estate  remaining 
in  the  hands  of  said  officer  or  trustee;  and  the  property  so 
deposited  shall  thereupon  be  held  by  such  trust  company,  under 
the  order  and  direction  of  said  court. 

Sec  94.     Such  trust  company  shall  not  be  required  to  Trust  company  not 

,j  .        .  "^     .  -i^j         required  to  give  boncL 

give  any  bond  or  security  in  case  of  any  appointment  or  de- 
posit of  moneys  or  other  personal  assets  hereinbefore  provided 
for,  except  as  provided  in  this  act,  but  shall  be  responsible 


68  OALIFOBNIA  BANE  ACT 

Trust  company  re-  for  all  investments  which  shall  be  made  by  it  of  the  funds 
sponsi  le  for  invent-  ^j^j^j^  ^^^  ^^  entrusted  to  it  for  investment  by  such  court, 
and  shall  be  liable  to  the  same  extent  as  an  individual,  and  as 
hereinafter  provided. 
Trust  company  to        Sec.  95.     Such  trust  company  shall  pay  interest  upon  all 
pay  m  eres  o^^^^,^^  moucys  SO  deposited  with  it  at  such  rate  as  may  be  agreed 
upon  at  the  time  of  its  acceptance  of  any  such  deposit,  or  as 
shall  be  provided  by  the  order  of  court  and  agreed  to  by  such 
trust  company. 
Trust  company  to         Sec.  96.     Any  such  trust  compauy,  if  its  principal  place  of 
"^^state^i^easur^to  busiucss  is  situatcd  in  a  city  the  population  of  which  does  not 
secure  performance  excecd  onc  hundred  thousaud  persons,  before  accepting  any 
andfcrivate  tmsts  such  appointment  or  deposit,  shall  deposit  with  the  state  treas- 
urer, as  herein  provided,  at  least  fifty  thousand  dollars  as  secur- 
ity for  the  faithful  performance  and  execution  of  all  court 
trusts    accepted    by    it,    and    shall    also    deposit    with    the 
state   treasurer    at   least   fifty   thousand    dollars    as    security 
for   the    faithful   performance   and   execution   of   all   private 
trusts  accepted  by  it;  and  whenever  any  such  trust  company 
(See  Sec.  98  for  pro-  ghall  uudcr  the  provisions  of  section  98  of  this  act  be  required 

visions  re.  additional  ,_<,..         .-  .         -  ..  -ii 

deposit)  to  make  the  first  additional  deposit  of  securities  with  the  state 
treasurer  such  trust  company  must  also  deposit  with  the  state 
treasurer  an  additional  fifty  thousand  dollars  as  security  for 
the  faithful  performance  and  execution  of  all  private  trusts 
accepted  by  it;  and  any  trust  company  if  its  principal  place 
of  business  is  situated  in  a  city  the  population  of  which  exceeds 
one  hundred  thousand  persons,  before  accepting  any  such  ap- 
pointment or  deposit,  shall  deposit  with  the  state  treasurer,  as 
herein  provided  at  least  one  hundred  thousand  dollars,  as  se- 
curity for  the  faithful  performance  and  execution  of  all  court 
trusts  accepted  by  it,  and  shall  also  deposit  with  the  state 
treasurer  at  least  one  hundred  thousand  dollars  as  security 
for  the  faithful  performance  and  execution  of  all  private  trusts 
Deposit  to  consist  accepted  by  it.  Any  such  deposit  may  be  made  either  in  lawful 
°drsL'TsecS?et  ^^^^y  ^^  t^^  United  States,  or  in  securities  of  either  or  any 
of  the  following  classes : 

(a)  Bonds  issued  by  the  United  States  or  by  this  state 
or  by  any  county,  city  and  county,  city  or  school  district 
therein ; 


TBUST  COMPANIES  69 

(b)  Bonds  for  the  payment  of  which  the  faith  and  credit  Deposits  with  sute 
of  the  United  States  or  of  this  state  are  pledged;  treasurer-cont'd. 

(c)  Notes  or  bonds  secured  by  mortgage  or  deed  of 
trust  constituting  a  first  Hen  on  improved  and  productive  real 
estate  in  the  State  of  California;  such  improved  real  estate 
being  worth  at  least  double  the  amount  of  such  lien. 

Such  money  or  securities  shall  be  first  approved  by  the  Deposit  to  be 
superintendent  of  banks  and,  upon  his  written  order,  deposited  *pp^°^®^  ^y  ^^p*- 
with  the  state  treasurer  for  the  respective  purposes  herein 
specified,  and  said  treasurer  shall  give  his  receipt  therefor, 
and  thereafter,  subject  to  the  provisions  of  this  act,  shall  hold 
such  deposits  of  money  or  securities  separately,  each  for  the 
sole  benefit  of  the  beneficiaries  of  the  class  of  trust  business, 
for  the  security  and  protection  of  which  the  same  was  depos- 
ited, and  said  treasurer  shall  give  his  receipt  therefor  and  state  responsible 
the  state  shall  be  responsible  for  the  custody  and  safe  return  ^°^^^^°^^^ 
of  any  money  or  securities  so  deposited.     Said  securities  or  Securities  may  be 
money  so  deposited  may,  with  the  approval  of  the  superintend-  ^^^  ^^^ 
ent  of  banks,  be  withdrawn  or  exchanged  from  time  to  time 
for  other  like  securities,  or  lawful  money,  receivable  as  afore- 
said, and  so  long  as  the  trust  company  so  depositing  said 
money  or  securities  shall  continue  solvent,  it  shall  have  the  Trust  company  shau 
right  and  shall  be  permitted  by  the  state  treasurer  to  receive  dMirnS'ontec^^tiea 
the  interest  and  dividends  on  any  securities  so  deposited.  Said  deposited 
securities  and  money  shall  be  subject  to  sale  and  transfer,  and  Deposit  subject  to 
to  the  disposal  of  the  proceeds  by  said  state  treasurer,  only  coi^fete.°"  °^*^^  °' 
on  the  order  of  a  court  of  competent  jurisdiction  and  for 
the  benefit  respectively  of  the  beneficiaries  of  that  class  of 
trust  business  for  the  security  and  protection  of  which  the 
same  were  deposited. 

Sec.  97.     Any  such  trust  company,  having  a  capital  and  Trust  company  with 
surplus  of  two  hundred  thousand  dollars  or  more  apportioned  "ZZ^^^-^^pte^L 
and  set  aside  as  security  for  the  faithful  performance  and  to  state  treasurer  as 
execution  of  all  court  trusts  accepted  by  it,  as  provided  in  this  ^^^  °    ^^°^^* 
act,  and  which  is  wholly  or  in  part  invested  in  the  lot  and 
building  in  which  its  business  is  carried  on,  may  be  permitted 
by  the   superintendent  of  banks  to  mortgage   such  lot  and 
building  to  the  state  treasurer  for  such  sum,  up  to  its  full 


70  CALIFORNIA  BANK  ACT 

Deposits  with  state  market  value,  as  the  superintendent  of  banks  may  determine, 
easurer— con     .  ^^^  ^^^^  mortgage  may  be  deposited  with  said  treasurer,  and 
when  so  deposited  it  shall  be  included  in  the  amount  of  securi- 
ties herein  required  to  be  deposited  with  said  treasurer  as 
security  for  the  faithful  performance  of  all  such  court  trusts. 

Trust  company  to  Sec.  98.  Whenever  any  trust  company,  the  principal 
deposit  additional  place  of  busincss  of  which  is  located  in  a  city  the  population 
security  with  state  of   which   docs   not   cxcccd   One   hundred   thousand   persons, 

treasurer  when  funds  .  -  •.  «        .  -        ,  ,  . 

received  by  it  from  fcceivcs  f rom  court  trusts  acccptcd  by  it,  trust  funds,  as  herem 
court  trusts  exceed  defined,  to  the  amount  of  five  hundred  thousand  dollars,  it 

specified  amounts      inri-i  •  r       '  ••  i 

snail  lortnwitn  notify  in  writing  the  superintendent  of  banks 
of  such  fact,  and  within  thirty  days  thereafter  shall  deposit 
with  the  state  treasurer  additional  money  or  securities  of  the 
character  mentioned  and  defined  in  section  ninety-six  of  this 
act,  approved  as  therein  provided,  in  the  amount  of  fifty 
thousand  dollars ;  and  whenever  any  trust  company  receives 
from  court  trusts  such  funds  to  the  amount  of  one  million 
dollars  it  shall  further  notify  in  writing  the  superintendent 
of  banks  of  such  fact  and  within  thirty  days  thereafter  shall 
deposit  with  the  state  treasurer  additional  money  or  securities 
of  the  character  mentioned  and  defined  in  section  ninety-six 
of  this  act,  approved  as  therein  provided,  in  the  amount  of 
fifty  thousand  dollars;  and  for  each  additional  five  hundred 
thousand  dollars  of  such  trust  funds  thereafter  received  by 
any  trust  company  from  court  trusts  a  similar  notification  in 
writing  shall  forthwith  be  given  to  the  superintendent  of 
banks,  and  a  further  deposit  in  the  amount  of  twenty-five 
thousand  dollars  of  such  money  or  securities,  or  of  securities 
provided  for  in  section  ninety-seven  of  this  act  likewise  ap- 
proved, shall  be  made,  within  thirty  days  thereafter,  by  such 
Custody  and  dispo-  trust  company  with  said  state  treasurer.     The  treasurer  shall 

sitton  of  such  deposits  ^        •' 

give  his  receipt  for  any  money  or  securities  so  deposited  and 
each  and  all  of  said  deposits  of  money  or  securities,  shall  be 
held  by  said  state  treasurer  for  the  sole  benefit  of  the  bene- 
ficiaries of  the  class  of  business  for  the  security  and  protection 
of  which  same  were  deposited.  The  state  shall  be  responsible 
for  the  custody  and  safe  return  of  any  money  or  securities 
♦Trust  funds"  defined  SO  deposited  with  Said  State  treasurer.  The  term  "trust 
funds"  when  used  in  this  section  shall  be  deemed  to  mean 


TEUST  COMPANIES  71 

and  shall  mean  personal  property  and  cash,  whether  received  Deposits  with  state 

with  the  original  trust  property  or  as  rent,  income  or  proceeds  ^'■^^"^®''-<^ont'd. 

thereof,  or  otherwise,  in  connection  with  the  trust,  and  shall 

not  be  deemed  to  include  and  shall  not  include  real  property. 

Any  trust  company  failing  to  comply  with  the  provisions  of  Penalty  for  non- 

this  section  shall  forfeit  to  the  State  of  California  one  hundred  ^^^^p^^^^^^  ^*^ 

dollars  a  day  for  each  day  during  which  such  failure  or  default 

shall   continue.     Upon   making   a  request   in   writing  to  the  Trust  company  may 

superintendent  of  banks,   any  such  trust  company   shall  be  TeeunTdeToS^dta 

entitled  to  withdraw  from  the  state  treasurer,  from  time  to  excess  of  require- 

rn    '  r  1  •  •  ^  ■,*     .  ments  of  act 

time,  a  sufficient  amount  of  such  securities  so  that  at  all  times 
the  amount  of  such  securities  so  deposited  shall  conform  to 
the  requirements  of  this  act,  and  so  that  at  no  time  shall  such 
trust  company  be  required  to  have  on  deposit  with  the  state 
treasurer  an  amount  of  securities  in  excess  of  the  requirements 
of  this  act.    Upon  receiving  such  request  in  writing,  and  satis-  Procedure  for 
factory   proof   of  the   facts   warranting   such   withdrawal,   it  ^i^^^rawai 
shall  be  the  duty  of  the  superintendent  of  banks  to  forthwith 
deliver  to  the  state  treasurer  a  written  order  directing  the 
withdrawal  of  said  securities  so  as  to  conform  with  the  pro- 
visions of  this  section,  and  it  shall  be  the  duty  of  the  state 
treasurer  to  comply  with  such  written  order.    The  validity  or  Legality  of  trust 
legality  of  any  act  or  proceeding  done  or  taken  by  any  such  ^rcS  k^t^s^ts 
trust  company,  relating  to  or  in  connection  with  the  adminis-  not  affected  by  its 
tration  of  any  such  trusts,  shall  not  be  affected  or  impaired  by  ^otS  ^th'ba^*°act 
the  neglect  or  failure  of  such  trust  company,  or  of  any  officer 
or  employee  thereof,  to  comply  with  any  of  the  provisions  of 
this  act,  but  all  such  acts  and  proceedings  done  or  taken  prior 
to  the  revocation  of  its  certificate  of  authority  to  do  such  busi- 
ness by  the  superintendent  of  banks,  under  the  provisions  of 
this  act,  or  the  revocation  by  any  court  or  judge  thereof  of  the 
appointment,  order  or  decree  theretofore  entered  in  such  trust 
matter  shall  be  as  valid  and  effective  for  all  purposes  as  if  any 
such  neglect  or  failure  had  not  occurred. 

Sec.   99.     When   any   part   of  the   securities   so  deposited  when  part  of  deposit 

•  ,•1.1,.^  .    ,  -  ,  ,  ,    consists  of  notes  or 

With  the  state  treasurer  consists  of  notes  or  bonds  secured  bonds  secured  by 
by  mortgage  or  deed  of  trust,  it  shall  be  accompanied  by  a  mortgage,  etc.,  same 

.  .       ^  .  -.,       tobe  accompanied  by 

complete  abstract  of  title  or  an  unlimited  certificate  of  title  abstract  of  title,  etc. 


72  CALIFOENIA  BANK  ACT 

Abstracts  to  be  OF  a  poHcy  of  title  insurance  prepared  or  issued  by  a  person, 
prov^underlecl  company  or   corporation   designated  or  approved  by  the 
tion  of  Supt.  superintendent  of  banks  and  authorized  by  law  or  otherwise 
found  by  the  superintendent  of  banks  to  be  competent  to 
issue  such  evidence  of  title,  which  shall  be  examined  and 
approved  by  or  under  the  direction  of  said  superintendent 
Fees  therefor  of  banks.    The  fccs  for  an  examination  of  such  evidence  of 
title  by  counsel  to  be  paid  by  the  trust  company  making  the 
deposit  shall  not  exceed  twenty  dollars  for  each  title  exam- 
ined, and  the  fee  for  each  appraiser,  not  exceeding  two,  shall 
not  exceed  five  dollars  for  each  mortgage  or  deed  of  trust. 

(Sec.  100.    Repealed  1913.) 

Classification  of  Sec.  101.  For  the  purposes  of  this  act,  all  trusts  per- 
mitted to  be  accepted  or  executed  by  any  such  trust  com- 
pany, under  any  provision  of  this  act  are  hereby  classified 
and  defined  as  either: 

(a)  Court  trusts ;  or 

(b)  Private  trusts. 

•Court  trust"  defined  A  court  trust  is  One  in  which  any  such  trust  company 
acts  under  appointment,  order  or  decree  of  any  court,  as 
executor,  administrator,  guardian,  assignee,  receiver,  de- 
positary or  trustee,  or  in  which  it  receives  on  deposit  from 
a  public  administrator,  under  any  provision  of  this  act, 
or  from  any  executor,  administrator,  guardian,,  assignee, 
receiver,  depositary  or  trustee,  under  any  order  or  decree 
of  any  court,  money  or  property. 
"Private  trust"         Any  Other  trust  is  a  private  trust. 

The  inspection  and  supervision  of  the  superintendent  of 

banks  shall   extend  only  to  court  trusts   as   herein   defined. 

Inspection  and  Private    trusts    shall    not    be    subject    to    the    inspection    or 

^'^TO^^court  trusts  Supervision  of  the  superintendent  of  banks,  his  attorneys, 

only  examiners  or  other  assistants. 

Report  to  Supt.        In  making  the  reports  to  the  superintendent  of  banks 

as  to  court  trusts  •      j   i        ^t  •  .  ,  i     ti     •  11.,. 

required  by  this  act,  every  trust  company  shall,  in  addition 
to  the  other  facts  to  be  reported  by  it,  furnish  only  a  list 
and  brief  description  of  the  court  trusts  held  by  it,  the 
source  of  appointment  thereto,  the  authority  by  which  the 
appointment  or  deposit  was  made,  and  the  amount  of  real 


TEUST  COMPANIES  73 

or  personal  property  held  by  such  trust  company  by  virtue 
thereof. 

Sec.  102.     Any    corporation    which    desires    to    withdraw  Corporation  may 
from  and  discontinue  doing  a  trust  business  shall  furnish  to  buTi^ess""^  "* 
the  superintendent  of  banks   satisfactory   evidence  of  its  Procedure 
release  and  discharge  from  all  the  obligations  and  trusts 
hereinbefore  provided  for,  and  thereupon  the  superintendent 
of  banks  shall  revoke  his  certificate  of  authority  to  do  a 
trust  business  theretofore  issued  to  such  corporation,  and  the 
state  treasurer  shall  return  to  said  corporation  all  the  securi- 
ties deposited  by  such  corporation  and  shall  cancel  any 
mortgage  made  by  such  corporation  to  said  state  treasurer 
as  a  part  of  such  securities,  and  thereafter  such  corporation 
shall  not  be  permitted  to  use  and  shall  not  use  the  word 
"trust"   in  its  corporate  name  or  in  connection  with  its 
business. 

Sec.  103.  Any  trust  company  exercising  the  powers  and  Private  trusts 
performing  the  duties  provided  for  in  this  act,  shall,  except 
as  herein  otherwise  provided,  keep  inviolate  all  com- 
munications and  writings  made  to  or  by  said  trustee  touch- 
ing the  existence,  condition,  management  and  administra- 
tion of  any  private  trust  confided  to  it;  and  no  creditor  or 
stockholder  of  any  such  trust  company  shall  be  entitled  to 
disclosure  or  knowledge  of  any  such  communication  or  writ- 
ing; provided,  however,  that  the  president,  vice-president.  Who  entitled  to 
manager,  trust  officer,  secretary  or  regularly  employed  at-  "^'^^  ^^ 
torney  of  any  such  trust  company  shall  be  entitled  to  knowl- 
edge of  any  such  communication  or  writing;  and  provided 
further,  that  in  any  suit  or  proceeding  touching  the  existence, 
condition,  management  or  administration  of  any  such  trust, 
the  court  wherein  the  same  is  pending  may  require  disclosure 
of  any  such  communication  or  writing. 

(Sec.  104.    Repealed  1913. 

Sec.   105.     Every  trust  company  shall,   except  as  other-  investment  of  capital, 
wise  provided  by  law,  invest  its  capital  and  surplus  and  f^s^by  trusr^ 
any  trust  funds  received  by  it  in  connection  with  its  trust  company 
business,  in  accordance  with  the  laws  relative  to  the  invest- 
ment or  loan  of  funds  deposited  with  savings  banks,  unless 


74  OALirOBNIA  BANK  ACT 

a  specific  agreement  to  the  contrary  is  made  between  the 
trust  company  and  the  party  creating  the  trust,  or  unless  it 
is  otherwise  ordered  by  the  court,  in  connection  with  any 
court  trust. 

Trust  company  to  do         Sec.    106.     Any   such  trust   compauy   desiring  to   do,   or 

departmental  business  •    t     i         t   •  i         .  .  i         « 

must  have  capital  doiug,  a  Commercial  banking  business  or  a  savings  bank 

specified  by  Sec.  23  busiucss,  or  both,  in  addition  to  its  trust  business  shall  have 

actually  paid  up,  in  cash,  the  amount  of  capital  provided  in 

section  twenty-three  of  this  act. 

Title  Insurance  com-        Any  title  iusurauce  company  authorized  by  its  articles 

^X%Tdoi°n^!^trust  °^  incorporation  to  do,  or  doing  a  trust  business,  in  addition 

business,  shall  comply  to  its  title   iusuraucc  business,  shall  comply  with  all  the 

with  specified  •  .  c  i  ...  •  i 

requirements  requirements  of  any  law  governing  trust  companies,  and 
shall  have  a  capital  stock  actually  paid  in,  in  cash,  of  not 
less  than  two  hundred  thousand  dollars,  and  in  addition 
thereto,  the  capital  stock  required  by  law  for  doing  a  title 
insurance  business.  Such  capital  for  each  such  department 
or  class  of  business  shall  be  increased  from  time  to  time  in 
the  same  manner  and  to  the  same  extent  as  though  each 
such  department  or  class  of  business  was  conducted  by  a 
separate  bank,  trust  company  or  title  insurance  company, 
instead  of  as  separate  departments  or  classes  of  business. 
Trust  and  Title  Any  trust  compauy  and  any  title  insurance  company  doing  a 
do^rXpartmS  departmental  business  as  above  provided  shall  comply  with 
business  the  provisious  of  this  act  governing  each  of  such  depart- 
ments and  with  the  provisions  of  any  law  governing  each 
such  class  of  business  as  to  its  deposits,  reserve,  surplus,  in- 
vestments and  loans. 

Further  provisions  Sec.  107.  Any  corporation  doing  a  departmental  business 
as  a  title  insurance  company  and  as  a  trust  company,  shall, 
as  to  its  trust  department,  be  subject  to  the  supervision  and 
inspection  of  the  superintendent  of  banks,  and  as  to  its  trust 
department  must  make  all  reports  to  the  superintendent  of 
banks  required  to  be  made  by  trust  companies  by  the  pro- 
visions of  this  act,  and  as  to  its  trust  department  such  corpora- 
tion shall  also  be  subject  to,  and  shall  have  the  benefit  of  all 
other  provisions  and  requirements  of  this  act  applicable  to 
trust  companies,  and  shall  also  be  subject  to  and  shall  have 


affecting  such 
corporation 


STATE    BANKING    DEPARTMENT  75 

the  benefit  of  all  of  the  banking  laws  and  rules  and  regxilations 
of  the  banking  department  of  this  state  applicable  to  trust 
companies.  The  proportionate  part  of  the  state  banking  fund  Proportionate  part 
provided  for  by  section  one  hundred  twenty-three  of  this  of  state  banking 
act,  that  shall  be  payable  by  such  corporation,  shall  be  based 
on  the  amount  of  capital  and  surplus  of  such  corporation  ap- 
portioned to  its  trust  department. 


ARTICLE  V. 

STATE  BANKING  DEPARTMENT. 

Sec.  120.     There  is  hereby  created  a  state  banking  depart-  state  Banking  De- 
ment.    The  chief  officer  of  such    department    shall    be    the  superin"!ndentV 
superintendent  thereof,  and  be  known  as  the  superintendent  appointment,  tenure, 
of  banks.     He  shall  be  appointed  by  the  governor,  and  shall  ^ond  ' 
hold  office  at  the  pleasure  of  the  governor.     He  shall  not, 
either  directly  or  indirectly,  be  interested  in  any  commercial 
bank,   savings  bank  or  trust  company,  or  as  an  individual 
banker.     He  shall  receive  an  annual  salary  of  ten  thousand 
dollars,  to  be  paid  monthly  out  of  the  state  treasury  on  a  war- 
rant of  the  controller.    He  shall,  within  fifteen  days  from  the 
time  of  notice  of  his  appointment,  take  and  subscribe  to  the 
constitutional  oath  of  office,  and  file  the  same  in  the  office  of 
the  secretary  of  state,  and  execute  to  the  people  of  the  state 
a  bond  in  the  penal  sum  of  fifty  thousand  dollars,  with  cor- 
porate surety  or  two  or  more  sureties  to  be  approved  by  the 
governor  of  the  state,  conditioned  for  the  faithful  discharge 
of  the  duties  of  his  office. 

Sec.   121.     The  superintendent  of  banks   shall  employ  a  superintendent  to 
chief  deputy,  attorney  and  such  examiners  and  other  assistants  t^5l^°^jHfi^t"ons 
as  he  may  need  to  discharge  in  a  proper  manner  the  duties  duties  and  com- 
imposed  upon  him  by  law,  none  of  which  examiners  or  assist-  p^°s^*^°° 
ants  or  attorney  shall  be  interested  in  any  bank  in  this  state 
as  director,  stockholder,  officer  or  employee,  and  they  shall 
perform  such  duties  as  he  shall  assign  to  them.    He  shall  fix 
the  compensation  of  the  chief  deputy,  attorney,  examiners  and 
other  assistants,  which  compensation  shall  be  paid  monthly  on 


76  CALIFOENIA  BANK  ACT 

his  certificate  and  on  the  warrant  of  the  controller  out  of  the 
Oath  and  quaiifi-  statc  treasury.    The  chief  deputy  shall  within  fifteen  days  from 
cations  of^cWe^  the  time  of  his  appointment  take  and  subscribe  to  the  con- 
stitutional oath  of  office  and  file  the  same  in  the  office  of  the 
secretary  of  state.    No  person  shall  be  appointed  a  chief  deputy 
who  has  not  had  at  least  three  years'  active  banking  experience, 
either  as  an  executive  officer  or  employee  of  some  bank  in  this 
During  absence  or  State.    In  casc  of  the  abscucc  or  inability  to  act,  or  vacancy  in 
inabUity  of  Super-  ^j^^  ^ff^^^  ^£  ^^^  superintendent  of  banks  for  thirty  consecutive 

intendent,  chief  ^  •' 

deputy  to  act,  upon  days,  the  chicf  deputy  shall  execute  to  the  people  of  the  state 
giving  bond  ^  i^Qjj^  jj^  ^j^g  penal  sum  of  fifty  thousand  dollars,  with  cor- 
porate surety  or  two  sureties  to  be  approved  by  the  controller 
and  treasurer  of  the  state,  conditioned  for  the  faithful  dis- 
charge of  the  duties  of  the  superintendent  while  such  deputy 
acts  as  superintendent,  and  upon  filing  such  bond  such  deputy 
shall  have  all  the  power  and  duties  of  superintendent  of  banks, 
until  the  inability  of  the  superintendent  shall  be  removed,  or 
until  a  new  superintendent  of  banks  shall  have  been  appointed 
Superintendent,  by  thc  govemor.     No  superintendent  of  banks,  chief  deputy, 
chief  deputy  or  ^j.  jj^uk  cxamiucr,  shall  be  or  shall  become  indebted,  directly 

examiner  not  to  be  .       .  '  "^ 

obligated  to  Or  mdirectly,  either  as  borrower,  endorser,  surety,  or  guarantor, 
any  bank  ^q  ^^y  bank  undcr  his  supervision  or  subject  to  his  examina- 
tion. 

Offices  of         Sec.  122.    The  superintendent  of  banks  shall  have  his  prin- 

^^F^andstrlnd  ^^P^^  ^^^^  ^^  ^^^  ^^^^  °^  ^^"  Francisco,  and  may  also  have 
Los  Angeles  Suitable  rooms  in  the  city  of  Los  Angeles,  wherein  to  conduct 
the  business  of  the  state  banking  department.  The  superin- 
tendent shall,  from  time  to  time,  obtain  the  necessary  furniture, 
stationery,  fuel,  lights,  and  other  proper  conveniences  for  the 
transaction  of  such  business;  the  expense  of  which  shall  be 
paid  out  of  the  state  treasury  on  the  certificate  of  the  superin- 
tendent and  the  warrant  of  the  controller. 

Expenses  to  be  Sec.  123.  A  fund  is  hereby  created  to  be  known  as  the 
^tti^^  w  state  banking  fund,  and  out  of  said  fund  shall  be  paid  all  the 
expenses  incurred  in  and  about  the  conduct  of  the  business  of 
the  banking  department,  including  the  salary  of  the  superin- 
tendent, chief  deputy,  attorney,  examiners  and  other  assistants, 
traveling  expenses,  furnishing  of  rooms  and  rent.    Each  bank 


STATE    BANKING    DEPAKTMENT  77 

shall  pay  annually  its  share  of  eighty-seven  thousand  five  hun-  Banks  to  pay  ex- 
dred  dollars,  to  be  determined  by  the  proportion  which  the  peases  of  state 

.      -  ,  ,  1.11,,.,,  banking  depart- 

capital  and  surplus  which  shall  include  all  reserve  and  contin-  ment,  pro-rated 

gent  funds,  of  any  incorporated  bank  or  the  surplus,  reserve  and°^^!us°  ""^^'^^ 

and  contingent  funds  of  any  bank  organized  without  a  capital 

stock  bear  to  the  capital,  surplus,  reserve  and  contingent  funds 

in  the  aggregate  of"  all  such  banks  receiving  certificates  of 

authorization  from  the  superintendent  of  banks,  as  shown  by 

the  last  report  of  such  bank  to  the  superintendent  of  banks. 

All  moneys  collected  or  received  by  the  superintendent  of  banks,  control  and 

under  and  by  virtue  of  the  provisions  of  this  act,  shall  be  by  disposition  of  state 

banking  fund 

him  delivered  to  the  treasurer  of  the  state,  who  shall  deposit 
the  same  to  the  credit  of  said  banking  fund,  and  the  unex- 
pended balances  of  all  moneys  heretofore  paid  into  the  state 
treasury  by  any  of  the  bank  commissioners  or  the  superintend- 
ent of  banks,  shall  be  retained  and  become  a  part  of  said  fund ; 
provided,  however,  that  the  superintendent  shall  have  authority 
to  retain  in  his  possession  and  under  his  control  the  sum  of 
five  hundred  dollars  to  be  used  by  him  as  a  revolving  fund  for 
the  benefit  of  the  state  banking  department  until  the  end  of  the 
fiscal  year  at  which  time  he  shall  make  full  settlement  with  the 
treasurer  of  the  state.  If  any  such  bank  shall  fail  to  pay  such  Penalty  for  non- 
charges  as  are  herein  required,  the  superintendent  shall  forth-  ^^^trata^of'^''^ 
with  cancel  the  certificate  of  said  bank.  expense 

Sec.  124.     Every  bank  and  the  trust  department  of  every  Every  bank  to  be 
title  insurance  company  doing  a  trust  business,  shall  be  subject  examined  at  least 
to  the  inspection  of  the  superintendent  of  banks.    The  super-  °°^^  *  ^^^^ 
intendent  of  banks,  the  chief  deputy,  or  some  competent  person 
or  persons  to  be  appointed  by  the  superintendent  of  banks,  to 
be  known  as  examiners,  shall  visit  and  examine  every  bank 
^at  least  once  each  fiscal  year.    On  every  such  examination  in-  what  examination 
quiries  shall  be  made  by  him  as  to  the  condition  and  resources  ^^^^  ''''^^^ 
of  the  bank,  the  mode  of  conducting  and  managing  its  aflfairs, 
the  action  of  its  directors,  the  investment  and  disposition  of 
its  funds,  the  safety  and  prudence  of  its  management,  the  se- 
curity afforded  to  those  by  whom  its  engagements  are  held 
and  whether  the  requirements  of  its  articles  of  incorporation 
and  the  law  have  been  complied  with  in  the  administration  of 


78  CALIFOBNIA  BANK  ACT 

Examinations  its  affairs,  and  as  to  such  other  matters  as  the  superintendent 

—continued  ^^^  prescribe.     Whenever,  in  the  judgment  of  the  superin- 

Superintendent  tcndent  of  banks,  the  condition  of  any  bank  renders  it  neces- 

may  make  extra  ^        ^^  expedient  to  make  an  extra  examination  or  to  devote 

examinations  at  -^  ^ 

bank's  expense  any  extraordinary  attention  to  its  affairs  the  superintendent 
of  banks  shall  have  authority  to  make  any  and  all  necessary 
extra  examinations  and  to  devote  any  necessary  extra  atten- 
tion to  the  conduct  of  its  affairs ;  and  such  bank  shall  pay  for 
all  such  extra  services  rendered  by  the  superintendent  of 
banks  at  a  price  to  be  fixed  by  the  superintendent  of  banks 

Superintendent  but  not  to  cxcccd  twcuty  dollars  per  day.  The  superintendent 
may  examine  q£  bauks  shall  also  havc  power  to  examine,  or  cause  to  be 

California  agency  ^  ' 

of  foreign  bank  examined,  every  agency  located  in  this  state  of  any  foreign 

bank  or  banking  corporation,  for  the  purpose  of  ascertaining 

whether  it  has  complied  with  the  laws  of  this  state,  and  for 

such  other  purposes  and  as  to  such  other  matters  as  the  su- 

Supt.  may  admin-  perintendeut  may  prescribe.     The  superintendent,  chief  dep- 

ister  oath  and  com-  ^^y   ^j^j  evcry  such  examiner  shall  have  the  power  to  admin- 

pel  attendance    .  .  . 

of  witnesses  istcr  an  oath  to  any  person  whose  testimony  he  may  require  on 

the  examination  of  any  bank,  or  on  the  examination  of  any 

agency  of  any  foreign  bank  or  banking  corporation,  and  to 

compel  appearance  and  attendance  of  any  such  person  for  the 

Examiner  shall  purposc  of  any  such  examination.     When  a  bank  shall  have 

report  doubtful  ^^^^^  examined  by  any  examiner,  and  he  finds  securities  therein 

securities  to  bupt.  -^         •'  ' 

which  are,  in  his  judgment,  of  doubtful  value,  he  shall  report 

the  same  to  the  superintendent  of  banks,  who  thereupon  shall 

Supt.  may  have  be  authorized  to  employ  appraisers  at  the  expense  of  such 

securitiS^apprail^d  ^^ank  to  appraise  said  securities,  at  a  compensation  to  be  fixed 

at  bank's  expense  by  the  Superintendent  of  banks.    The  superintendent  of  banks 

Supt.  shall  provide  ghall,  whcncvcr  requested  to  do  so  by  any  bank,  provide  an 

auditor  at  bank's  '  ^  j  j  f    tr 

expense  when  auditor  to  make  an  audit  of  the  affairs  of  such  bank.     The 

bank  requests  compensation  for  making  such  audit  shall  be  paid  by  the  bank 

direct  to  the  person  making  the  audit.    Nothing  herein  shall  be 

Supt.  not  to  exam-  deemed  to  authorize  or  require  the  superintendent  of  banks 

ine  private  trust  ^^  inspect  Or  supervisc  the  private  trust  business  or  title  in- 

or  title  insurance  sr  sr  r 

business  surauce  business  of  any  corporation  doing  a  trust  business. 

Oath  of  examiners         Sec.  125.    Evcry  examiner  appointed  by  the  Superintendent 
of  banks  shall,  before  entering  upon  the  discharge  of  his  duties, 


STATE    BANKING    DEPAETMENT  79 

take  the  constitutional  oath  of  office  and  cause  the  same  to  be 

filed  in  the  office  of  the  secretary  of  state.    No  such  examiner  No  examiner  to  be 

shall  be  appointed  receiver  of  any  bank  whose  books,  papers  appointed  receiver 

and  affairs  he  shall  have  examined  pursuant  to  his  appoint-  by  him 

ment. 

Sec.  126.    If  the  chief  deputy  or  any  examiner  shall  have  Neglect  of  chief 

knowledge  of  the  insolvency  or  unsafe  condition  of  any  bank  foreportVnT^"^ 

mentioned  in  this  act,  and  that  it  is  unsafe  or  inexpedient  to  unsafe  conditions 

permit  said  bank  to  continue  business,  and  shall  neglect  to  "^^^^^^"""^ 
forthwith  report  such  fact  in  writing  over  his  signature  to  the 
superintendent  of  banks,  he  shall  be  guilty  of  felony. 

Sec.    127.     No  bank  shall  transact  any  business  in  this  Bank  must  have 
state  without  the  written  approval  of  the  superintendent  of  supt^bXtTans- 
banks,  and  without  his  written  certificate  stating  that  it  has   acting  business 
complied  with  the  provisions  of  this  act,  and  all  the  require- 
ments of  law,  and  that  it  is  authorized  to  transact,  within 
this  state,  the  business  specified  therein;  which  certificate  Certificate  may  be 
may  be  withheld  by  the  superintendent  of  banks  whenever  under^certJiii  "^^^ 
he  has  reason  to  believe  that  the  bank  is  being  formed  for  conditions 
any  other  than  the  legitimate  objects  contemplated  by  this 
act,  or  whenever  he  has  reason  to  believe  that  the  public 
convenience  and  advantage  will  not  be  promoted  by  the 
opening  of  such  bank,  or  whenever  he  has  reason  to  believe 
that  the  corporate  name  assumed  by  such  bank,  by  reason 
of  the  use  by  it  of  any  one  or  more  of  the  words  "commer- 
cial," "trust,"  or    "savings,"    in  conjunction  with  any  other 
word  or  words,  resembles  so  closely  as  to  be  likely  to  cause 
confusion,  the  name  of  any  other  bank  previously  formed 
under  the  laws  of  this  state.    Before  issuing  such  certificate  Certificate  not  to 

.  .  .  be  issued  before 

the  supermtendent  of  banks  shall  examme,  or  cause  an  ex-  examination  and 
amination  to  be  made,  in  order  to  ascertain  whether  the  showing  of  com- 

.  ,      ,         ,     ,  «  -J  •  1  pliance  with  require- 

requisite  capital  of  such  bank  has  been  paid  up  in  cash  or  ments  as  to  capital 
the  requisite  reserve  or  surplus  fund  has  been  accumulated,  and  surplus 
The  superintendent  of  banks  shall  not  authorize  such  banks 
to  commence  business  until  it  appears  from  such  examina- 
tion, or  other  evidence  satisfactory  to  him,  that  the  requisite 
capital  has  been,  in  good  faith,  subscribed  and  paid  in,  in 
cash,  or  that  the  requisite  surplus  or  reserve  fund  has  been 


80  CALIFOBNfIA  BANE  ACT 

Fees  payable  accumulated  or  paid  in,  in  cash,  and  until  said  bank  shall 
have  paid  a  fee  of  fifty  dollars  for  each  department  to  be 
operated  by  said  bank. 

When  articles  filed        Sec.  128.     When  the  certified  copy  of  articles  of  incor- 
sute  alTappUca-  PO^ation  of  any  bank  shall  have  been  filed  with  the  secretary 
tion  made  for  car-  of  statc,  and  application  made  for  the  issuance  of  a  certificate 
ascertain  fitaess  ^^  do  busincss  as  a  bank,  the  superintendent  of  banks,  pro- 
of persons  named  vided  he  has  not  withheld  sfrantinsr  his  certificate  for  any 

as  stockholders  .  "^ 

of  the  reasons  set  forth  in  section  one  hundred  twenty- 
seven  hereof,  shall  ascertain,  from  the  best  sources  of  in- 
formation at  his  command,  whether  the  character  and  gen- 
eral fitness  of  the  persons  named  as  stockholders  are  such 
as  to  command  the  confidence  of  the  community  in  which 
such  bank  is  proposed  to  be  located,  and,  if  so  satisfied,  he 
shall,  within  sixty  days  after  such  application  has  been 
made  to  him,  issue,  under  his  hand  and  official  seal,  the 
certificate  of  authorization  required  by  this  act.  The  super- 
DupUcate  of  cer-  intcndcnt  of  banks  shall  transmit  a  duplicate  of  such  certifi- 

tificate  of  authori-  r  ,^         •       ,-  ^  i  i      i         r      i 

zation  to  be  filed  catc  of  authorization  to  the  county  clerk  of  the  county  in 

with  county  clerk,  ^hich  the  principal  place  of  business  of  such  bank  is  located, 

and  he  shall  file  the  same  in  his  office.    The  superintendent 

of  banks  shall  also  file  a  duplicate  of  such  certificate  in  his 

own  office. 

Departmental  bank         Sec.  129.    Evcry  bank  doiug  a  departmental  business  shall 
must  make  and  render  to  the  superintendent  of  banks  for  each  department 

publish  separate  ,  ,  ,       .  ......  .       - 

financial  reports  conductcd  by  it,  a  Separate  report  showing  in  detail  as  required 
of  each  department  ^y  scction  ouc  hundred  thirty  of  this  act,  the  actual  financial 
condition  of  such  department  and  shall  at  the  time  of  furnish- 
ing said  report  separately  publish  the  statement  for  each 
department  as  provided  in  section  one  hundred  thirty-two  of 
this  act. 

Verified  reports        Sec.  130.     Every  bank,  organized  under  the  laws  of  this 
to  be  made  by  bank  state,  shall,  whenever  required  by  the  superintendent  of 

whenever  required  ...  ,  .  •  r-      t  i  i 

by  Superintendent  banks,  make  a  report  in  writing  to  him,  verified  by  the  oath 
of  its  president  and  its  secretary  or  cashier,  or  two  principal 
officers.  Such  reports  shall  show  the  actual  financial  con- 
dition of  the  bank  making  the  report,  at  the  close  of  any 


STATE    BANKING    DEPARTMENT  81 

past  day  designated  by  the  superintendent,  and  shall  specify  Bank  reports- 

the  following:  continued 

1.  The  amount  of  its  capital  stock  and  the  number  of  what  such  reports 
shares  into  which  it  is  divided.  must  show 

2.  The  names  of  the  directors  and  the  number  of  shares 
of  stock  held  by  each. 

3.  The  total  amount  of  capital  actually  paid  in,  in  cash, 
and  the  total  amount  of  surplus,  reserve  and  any  other  funds. 

4.  The  total  amount  due  the  depositors. 

5.  The  total  amount  and  character  of  any  other  liabili- 
ties it  may  have. 

6.  The  amount  at  which  the  lot  and  building  occupied 
by  the  bank  for  the  transaction  of  its  regular  business  stands 
debited  on  its  books;  also  the  market  value  of  all  other  real 
estate  held,  whether  acquired  in  settlement  of  loans  or  other- 
wise, the  original  cost  to  the  bank,  the  date  when  acquired,  the 
amount  at  which  it  stands  debited  on  the  bank  books,  in  what 
counties  situated,  and  in  what  name  the  title  is  vested,  if  not 
in  the  name  of  the  bank  itself. 

7.  The  amount  loaned  on  real  estate,  specifying  the 
amount  secured  on  real  estate  in  each  county  separately; 
also  specifying  the  name  of  the  person  in  whose  name  the 
property  is  held  in  trust  or  as  security,  in  case  it  is  held  in 
any  name  other  than  that  of  the  bank  and  the  instrument 
creating  the  security  does  not  itself  disclose  the  name  of 
the  bank. 

8.  The  amount  invested  in  bonds,  designating  the  name 
and  amount  of  each  particular  kind. 

9.  The  amount  loaned  on  stocks  and  bonds,  designating 
each  particular  class  and  the  amount  thereof. 

10.  The  amount  of  money  loaned  on  other  securities, 
with  a  particular  designation  of  each  class  and  the  amount 
loaned  on  each. 

11.  The  amount  and  kind  of  money  on  hand  or  deposited 
in  any  other  bank  or  place,  with  the  name  of  the  place 
where  deposited  and  the  amount  in  each  place. 

12.  Any  other  property  held,  or  any  amount  of  money 
loaned,  deposited,  invested  or  placed,  not  otherwise  herein 


82  OAUFOBIOA  BANS  ACT 

Bankreporu—  enumerated,  and  the  place  where  situate  and  the  value  of 

continued         .  ,  ,       ,  ,  ,        ,  .       , 

said   property,   and   the   amount   so   loaned,   deposited   or 

What  such  reports    plaCcd. 

13.  The  date  on  which  examination  of  the  bank  was 
last  made  by  its  board  of  directors  and  the  date  on  which 
report  of  such  examination  was  filed,  as  required  by  section 
one  hundred  thirty-nine  of  this  act. 

14.  The  outstanding  and  unpaid  amounts  of  any  loans 
made  by  the  bank,  which  under  the  provisions  of  either 
section  sixty-five  or  eighty-three  of  this  act  are  required 
to  be  reported  to  the  superintendent  of  banks. 

15.  Any  overdrafts  and  any  loans,  investments,  acts  or 
omissions  violative  of  or  not  in  conformity  with  any  provision 
of  this  act  which  may  be  specifically  called  for. 

California  branch         Evcry  foreign  Corporation  transacting  the  business  of 

of  foreign  bank  to    ,         ,  .  .         ,  .  i      1 1  i  i  i  •  •        , 

render  verified  banking  in  this  State  shall  make  the  report  herein  required 
report  to  supt.  ^s  far  as  such  report  may  relate  to  the  affairs  of  such  cor- 

whenever  required  .  .  ,   . 

poration  in  this  state,  and  every  foreign  corporation  must 
particularly  render  the  report  required  by  subdivisions  three, 
four,  five,  six,  seven,  eight,  nine,  ten,  eleven,  twelve,  thirteen, 
fourteen,  and  fifteen  of  this  section.  Such  report  shall  be  made  in 
writing  and  verified  by  the  oath  of  one  of  its  duly  authorized 
officers  or  managers  residing  in  this  state.  The  oaths 
of  the  officers  and  the  statements  above  required  shall  state 
that  they  and  each  of  them  have  a  personal  knowledge  of 
the  matters  therein  contained,  and  that  they  believe  every 
allegation,  statement,  matter,  and  thing  therein  contained 
is  true.  Any  willful  false  statement  in  the  premises  shall  be 
perjury  and  shall  be  punished  as  such. 

Superintendent         Sec.  130a.     In  addition  to  the  information  obtained  from 

may  require  any    ,,  ^  -        i  i  ^  ••  r  •  <<i 

bank  to  furnish  ^^e  report  required  by  the  provisions  of  section  one  hundred 
additional  verified  thirty  of  this  act,  the  superintendent  of  banks  shall  also 
have  the  power  to  require  any  bank  to  furnish  a  special  report 
in  writing,  verified  as  required  by  section  one  hundred  thirty 
of  this  act,  whenever  in  his  judgment  such  special  report  is 
necessary  to  inform  him  fully  of  the  actual  financial  condition 
Wilful  false  state-  ^nd  afifairs  of  such  bank.     Any  wilful  false  statement  in  the 

ment  in  report  ... 

deemed  perjury  prcmiscs  shall' bc  perjury  and  shall  be  punished  as  such. 


STATE    BANKING    DEPABTMENT  83 

Sec.  131.     The  superintendent  of  banks  shall  call  for  the  Superintendent 

reports  specified  by  section  one  hundred  thirty  of  this  act  It  kasflhreYtk^II^ 

at  least^three  times  each  year.     The  "past  day  designated  ^y^^^ 

by  the  superintendent"  of  banks  under  the  provisions  of  "Past;day."  etc.. 

section  one  hundred  thirty  of  this  act  shall  be  as  nearly  as  pos^stbie  dS'desTg- 

possible  the  day  designated  by  the  comptroller  of  currency  nated; for  reports  of 
of  the  United  States  for  reports  of  national  banking  associa- 
tions. 

Sec.  132.     At  the  time  of  furnishing  such  report  to  the   Bank  shaii  publish 
superintendent  of  banks,  every  bank  shall  also  publish  a  con-  condensed  state- 

^  '  -^  ^  .         ment  of.  financial 

densed  statement  of  its  financial  condition,  at  least  once,  in   condition  at  time  oi 

some  newspaper  of  general  circulation,  published  in  the  city  ^^^^hmg  above 

or  town  where  its  principal  place  of  business  is  located,  and,  if 

no  paper  is  published  in  such  town,  then  in  some  newspaper  of 

general  circulation  in  the  county  where  its  principal  place  of 

business  is  located.     Such  published  statement  shall  show  the  what  published 

total  amount  of  loans,  the  total  amount  of  overdrafts,  the  total  statement  shau 

show 

amount  invested  in  bonds  and  other  securities,  the  total  amount 
due  from  banks,  the  total  amount  of  checks  and  other  cash 
items,  the  total  amount  of  cash  on  hand,  capital  paid  in,  surplus 
funds ;  undivided  profits,  less  expenses  and  taxes  paid ;  due  to 
other  banks  and  bankers,  due  to  trust  companies  and  savings 
banks;  individual  deposits  subject  to  checks;  demand  certifi- 
cates of  deposit;  time  deposits;  certified  checks;  cashier's 
checks  outstanding;  and  such  other  items  as  will  show  the 
actual  financial  condition  of  the  bank  making  the  report. 

Sec.   133.     Whenever  it  shall  appear  from  the  report  of  in  case  Supt.  finds 
any  bank,  or  the  superintendent  of  banks  shall  have  reason  impairment  of  cap- 

.      ..  .  .      .        .  .         .      .       .  .        ,  ital,  he  shall  require 

to  believe  that  the  capital  of  any  bank  is  impaired  or  re-  bank  to  make  good 
duced  below  the  amount  required  by  law,  it  shall  be  the  the  deficiency 

within  60  days 

duty  of  the  superintendent  of  banks  and  he  shall  have  the 
power  to  examine  said  bank  and  ascertain  the  facts, 
and  in  case  he  finds  such  impairment  or  reduction  of  capital, 
he  shall  require  such  bank  to  make  good  the  deficiency  so 
appearing  within  sixty  days  after  the  date  of  such  requisi- 
tion. The  directors  of  every  such  bank,  upon  which  such  Directors  of  bank 
requisition  shall  have  been  made,  shall  levy  an  assessment  to  re^i? such™^"* 
upon  the  stock  thereof  to  repair  such  deficiency,  and  shall  deficiency 


84  CALIFORNIA  BANK  ACT 

cause  notice  of  such  requisition  to  be  given  to  each  stock- 
stock  assessments  holder  of  the  bank  and  of  the  amount  of  the  assessment 
impai^fcapual  which  hc  must  pay  for  the  purpose  of  making  good  such 
deficiency,  by  a  written  or  printed  notice  mailed  to  such 
stockholder  at  his  last  known  address  or  served  personally 
Procedure  for  levy-  upou  him.     If  any  Stockholder  shall  refuse  or  neglect  to 
'""^aisme^nfon  P^^  ^^^  assscssmcnt  Specified  in  such  notice  within  thirty 
bank  stock  days  from  the  date  of  mailing  or  serving  such  notice  as 
aforesaid,  the  directors  of  such  bank  shall  have  the  right  to 
sell  to  the  highest  bidder  at  public  auction  the  stock  of  such 
stockholder,  after  giving  a  previous  notice  of  such  sale  for 
ten  days  in  a  newspaper  of  general  circulation  published  in 
the  county  where  the  principal  place  of  business  of  such 
bank  is  located,  and  a  copy  of  such  notice  of  sale  shall  also 
be  served  on  the  owner  of  such  stock  by  being  served  per- 
Directors  may  sell  soually  On  him  or  by  mailing  to  his  last  known  address  ten 
^^^private  sate  ^^.ys  before  the  day  fixed  for  such  sale ;  or  such  stock  may  be 
sold  at  private  sale  and  without  such  public  notice;  provided, 
however,  that  before  making  such  private  sale  thereof  an  offer 
^suchtrivS^sTie  ^^  Writing  shall  first  be  obtained  and  a  copy  thereof  served 
upon  the  owner  of  record  of  the  stock  sought  to  be  sold, 
either  personally  or  by  mailing  a  copy  of  such  offer  to  his 
last  known  address;  and  if,  after  service  of  such  offer,  such 
owner  shall  still  refuse  or  neglect  to  pay  such  assessment 
within  two  weeks  from  the  time  of  the  service  of  such  offer, 
the  said  directors  may  accept  such  offer  and  sell  such  stock 
to  the  person  making  such  offer,  or  to  any  other  person  or 
persons  making  a  larger  offer  than  the  amount  named  in 
the  offer  submitted  to  the  stockholder ;  but  such  stock  shall 
in  no  event  be  sold  for  a  smaller  sum  than  the  valuation  put 
on  it  by  the  superintendent  of  banks  in  his  determination 
and  requisition  as  to  said  assessment,  nor  for  less  than  the 
amount  of  said  assessment  so  called  for  and  the  expense 
AppUcation  of  of  Sale.    Out  of  the  avails  of  the  stock  so  sold,  the  directors 
proceeds  of  sale  gj^^^n  p^y  ^j^^  amouut  of  asscssmcut  levied  thereon,  and  the 
necessary  costs  of  sale,  and  the  balance,  if  any,  shall  be  paid 
to  the  person  or  persons  whose  stock  has  thus  been  sold. 
Effects  of  sale  A  salc  of  stock  as  herein  provided  shall  eifect  an  absolute 
of  assessed  stock  cancellation  of  the  outstanding  certificate  or  certificates  evi- 


STATE    BANKING    DEPARTMENT  85 

dencing  the  stock  so  sold,  and  shall  make  the  same  null  and 
void,  and  a  new  certificate  shall  be  issued  by  the  bank  to 
the  purchaser  thereof. 

Sec.    134.     If   it   shall   appear   to   the   superintendent   of  Superintendent  may 
banks  that  any  bank  has  violated  or  failed  to  comply  with  eonlLur^oTattis 
the  provisions  of  its  articles  of  incorporation,  or  any  law  of  its  articles  or 
of  this  state,  he  may,  by  an   order  under  his  hand  and  ^*^*^  ^^^' ^*^- 
official  seal,  which  seal  must  be  adopted  by  him,  addressed 
to  such  bank,  direct  such  bank  to  discontinue  such  violation 
and  to  comply  with  the  law;  or,  if  it  shall  appear  to  the 
superintendent  of  banks  that  such  bank  is  conducting  busi- 
ness in  an  unsafe  or  injurious  manner,  he  may,  in  like  manner 
direct  the  discontinuance  of  any  such  unsafe  or  injurious 
practices.    Such  order  shall  require  such  bank  to  show  cause,  Such  order  shau 

,      r  1  •  1  <•   1         1  •  f       1  require  banks  to 

before  the  supermtendent  of  banks,  at  a  time  and  place  to  show  cause  why 
be  fixed  by  him,  why  said  order  should  not  be  observed,  order  shall  not  be_ 

xr  1     1  •  .        1     ii  1  .  1  made  final 

If  Upon  such  hearing  it  shall  appear  to  the  superintendent 

of  banks  that  such  bank  is  conducting  business  in  an  unsafe 

or  injurious  manner,  or  is  violating  or  failing  to  comply  with 

the  provisions  of  its  articles  of  incorporation,  or  any  law 

of  this  state,  then  the  superintendent  of  banks  shall  make 

such  order  final,  and  such  bank  shall  immediately  comply 

with  such  order  made  by  the  superintendent  of  banks.  Such  k  such  order  is  made 

bank  shall  have  ten  days  after  any  such  order  is  made  final  days' to  secure 

in  which  suit  may  be  commenced  to  restrain  enforcement  injunction 

of  such  order,  and  unless  such  action  be  so  commenced  and 

enforcement  of  said  order  be  enjoined  within  ten  days,  by 

the  court  in  which  such  suit  is  brought,  then  such  bank 

shall  comply  with  such  order. 

Sec.  135.     Whenever   the   superintendent   of  banks    shall  Superintendent  may 
deem  it  expedient  he  may  call  a  meeting  of  the  stockholders  of  stockholders  of 
any  bank  organized  under  the  laws  of  this  state,  by  a  personal  banks 
notice  of  such  meeting  for  fifteen  days  previous  thereto.    All 
necessary  expense  incurred  in  the  serving  of  such  notice  shall 
be  borne  by  the  bank  whose  stockholders  are  required  to  con- 
vene. 

Sec.  135a.     If  the  capital  of  any  bank  shall  be  impaired, 
or  if  any  bank  shall  refuse  to  submit  its  books,  papers  and  con- 


86  OALIFOBNIA  BAITS  ACT 

Involuntary  ccms  to  the  inspection  of  any  examiner,  or  if  any  officer  there- 
of shall  refuse  to  be  examined  upon  oath  touching  the  concerns 
of  such  bank,  or  if  such  bank  shall  violate  the  provisions  of 
Action  by  Supt.  to  its  afticles  of  incorporation,  or  any  law  of  this  state,  or  if 
im^h-Id  crpitaror  such  bank  shall  suspend  payment  of  its  obligations,  or  if 

refusing  to  submit  such  bank  shall  conduct  its  business  in  an  unsafe  or  un- 
to examination,  or  .  .         . 

violating  law  of  authoHzcd  manner,  or  if  from  any  examination  or  report  pro- 
state.  or  suspending  ^j^^^  £^j.  ^     ^^jg  ^^^  ^^^  Superintendent  of  banks  shall  con- 

payment,  or  con-  -^  ^      ^        ^ 

ducting  business  clude  that  such  bank  is  in  an  unsound  or  unsafe  condition 

muns  e  manner,  ^^  transact  the  busincss  for  which  it  is  organized,  or  that 

it  is  unsafe  and  inexpedient  for  it  to  continue  business,  an 

action  to  procure  a  judgment  dissolving  such  corporation 

may  be  maintained  by  the  superintendent  of  banks. 

Superintendent  may         ggc,  135,     Whenever  it  shall  appear  to  the  superintendent 

take  possession  of  ,  111  •    1  1     1  •    •  ,•   •  . 

business  and  prop-  of  banks  that  any  bank  has  violated  the  provisions  of  its  arti- 
erty  of  such  bank  ^j^g  Qf  incorporation  or  any  law  of  this  state,  or  is  conducting- 

until  it  resumes  ,  *=* 

business  or  its  affairs  its  busiucss  in  an  uusafc  or  unauthorized  manner,  or  if  the  cap- 
beifinaiiy  liquidated  -^^j  ^£  ^^^  ^^^^  -g  jj^paired,  or  if  any  bank  shall  refuse  to  sub- 
mit its  books,  papers  and  concerns  to  the  inspection  of  any  ex- 
aminer, or  if  any  officer  thereof  shall  refuse  to  be  examined 
upon  oath  touching  the  concerns  of  any  such  bank  or  if  any 
bank  shall  suspend  payment  of  its  obligations,  or  if  from  any 
examination  or  report  provided  for  by  this  act  the  superin- 
tendent of  banks  shall  have  reason  to  conclude  that  such  bank 
is  in  an  unsound  or  unsafe  condition  to  transact  the  business 
for  which  it  is  organized,  or  that  it  is  unsafe  and  inexpedient 
for  it  to  continue  business,  or  if  any  bank  shall  neglect  or 
refuse  to  observe  any  order  of  the  superintendent  of  banks 
specified  in  sections  one  hundred  thirty-three  or  one  hundred 
thirty-four  of  this  act,  the  superintendent  of  banks  may 
forthwith  take  possession  of  the  property  and  business  of 
such  bank  and  retain  such  possession  until  such  bank  shall 
resume  business,  or  its  affairs  be  finally  liquidated  as  herein 
Procedure  to  be  provided.  On  taking  possession  of  the  property  and  busi- 
foiiowedbySupt.  j^ggg   ^f  g^^j^   ^^^^   ^^ve    Superintendent  of  banks  shall 

in  conserving  assets  •'  ^  1111 

and  liquidating  forthwith  givc  noticc  of  such  fact  to  any  and  all  banks,  trust 
such  bank  companies,  associations  and  individuals,  holding  or  in  pos- 
session of  any  assets  of  such  bank.    No  bank,  trust  company, 


STATE    BANKING    DEPAKTMENT  87 

association  or  individual  knowing  of  such  taking  possession   involuntary  disso- 
by  the  superintendent  of  banks,  or  notified  as  aforesaid,  shall  »"tion-continued 
have  a  lien  or  charge  for  any  payment,  advance  or  clearance 
thereafter  made,  or  liability  thereafter  incurred  against  any  of 
the  assets  of  the  bank  of  whose  property  and  business  the  su- 
perintendent of  banks  shall  have  taken  possession  as  aforesaid. 
Such  bank  may,  with  the  consent  of  the  superintendent  of  Bank  may  resume 
banks,  resume  business  upon  such  conditions  as  may  be  ap-  business  with  con- 

'  ^  "^  -^        sent  of  Supt. 

proved  by  him.    Upon  taking  possession  of  the  property  and 
business  of  any  such  bank  the  superintendent  of  banks  shall 
have  authority  to  collect  moneys  due  to  such  bank  and  do  such 
other  acts  as  are  necessary  to  conserve  its  assets  and  business, 
and  shall  proceed  to  liquidate  the  affairs  thereof  as  herein- 
after provided.  The  superintendent  of  banks  shall  collect  all 
debts  due  and  claims  belonging  to  it,  and  upon  the  order  of  the 
superior  court  may  sell  or  compound  any  bad  or   doubtful 
debts.    If  a  purchaser  for  any  bad  or  doubtful  debts  cannot 
be  obtained  and  it  appears  improbable  that  recovery  thereon 
can  be  had  and  that  the  costs  of  actions  to  enforce  collection 
of  the  same  would  probably  be  lost,  the  court  may  direct 
that  suits  thereon  need  not  be  brought.     On  like  order  he  On  order  of  court, 
may  sell  any  real  or  personal  property  of  such  bank  on  such  ^r'^JouS'deb'tf 
terms  as  the  court  shall  direct ;  and  may,  if  necessary  to  pay  or  sue  or  refrain 
the  debts  of  such  bank,  enforce  the  constitutional  individual  tay  sdlTeaforTr- 
liability   of  stockholders   by   action   to  be   brought  within  sonai  property  of 
three  years  after  the  date  of  his  taking  possession  of  the  £or«^toShdders" 
affairs  of  such  bank.     The  superintendent  of  banks  shall  liability,  etc. 
determine  the  necessity  of  such  action  and  the  amount  neces- 
sary to  recover  from  the  stockholders  to  fully  pay  all  liabili- 
ties of  such  bank.    Such  action  may  be  in  equity  and  against 
all  stockholders  upon  whom  service  of  process  in  the  State 
of  California  can  be  had,  and  the  court  may  therein  deter- 
mine and  provide  for  any  equities  as  between  the  stock- 
holders including  the  proportions  of  each  stockholder  to  any 
surplus  of  money  or  assets  that  may  remain  after  the  pay- 
ment of  all  liabilities  and  the  expenses  of  liquidation.    The 
superintendent  of  'banks    may    also    maintain    an    action 
against  any  stockholder  residing  out  of  the  state  or  upon 
whom  service  of  process  cannot  be  had  within  the  state,  in 


88  OALIFOBNIA  BANK  ACT 

Involuntary  disso-  any  couft  of  the  United  States  or  of  any  state  or  country. 

lution-continued  ^^^  judgment  SO  obtained  by  the  superintendent  of  banks 
against  such  or  any  of  such  stockholders  which  is  of  doubtful 
value  may  be  compromised  and  compounded  by  the  super- 
intendent of  banks  on  such  terms  and  conditions  as  the 
Supt.  shall  file  superior  court  may  direct  or  authorize.    The  superintendent 

with  county  recorder  ^£  ^^^^j^g  gj^^jj  gj^  ^  noticc  of  pcudcncy  of  actiou  in  the 

notice  of  pendancy  ^  -^ 

of  such  action  county  recorder's  office  of  the  county  where  such  action  is 
brought.    At  any  time  prior  to  the  trial  of  any  such  action, 
Creditor  may  in  any  Creditor  may  serve  upon  the  superintendent  of  banks 
^"^minfaiifaction  ^^^  ^^^  ^^^^  ^^^  court  whcrcin  such  action  is  pending,  notice 
against  stockholders  that  he  clects  to  maintain  an  action  against  the  stockholders 
or  any  of  them  ^^  ^^^  ^£  them,  in  his  individual  capacity  and  thereupon  the 
amount  sued  for  in  such  action  shall  be  reduced  accordingly 
and  such  creditor  shall  not  be  entitled  to  share  in  the  pro- 
ceeds resulting  from  such  action  brought  by  the  superin- 
Superintendent  may  tcndcnt  of  banks.     For  the  purposc  of  executing  and  per- 
quentbankorinWs  forming  any  of  the  powers  and  duties  hereby  conferred  upon 
own  name  prosecute  him,  the  Superintendent  of  banks  may,  in  the  name  of  the 
etc!!  executl  aiHn-  delinquent  bank  or  in  his  own  name,  prosecute  and  defend  any 
struments  necessary  and  all  suits  and  othcr  legal  proceedings  and  may,  in  the 

to  effectuate  sale  of  r^iji*  j.li  -i*  j^ 

real  or  personal  name  of  the  delinquent  bank  or  in  his  own  name  as  trustee 

property  or  com-  exccute,  acknowlcdge  and  deliver  any  and  all  deeds,  assign- 

^'^°Tf^coi^%tT.  nients,  releases  and  other  instruments  necessary  and  proper 

to  effectuate  any  sale  of  real  or  personal  property  or  sale 

or  compromise  or  compound  authorized  by  order  of  the 

court  as  herein  provided ;  and  any  deed  or  other  instrument, 

executed  pursuant  to  the  authority  hereby  given,  shall  be 

valid  and  effectual  for  all  purposes,  as  though  the  same  had 

been  executed  by  the  officers  of  the  delinquent  bank  by 

authority  of  its  board  of  directors.    In  case  any  of  the  real 

property  so   sold  is  located  in   a  county  other  than  the 

county  in  which  the  application  to  the  court  for  leave  to 

sell  the  same  is  made,  the  superintendent  of  banks  shall 

cause  a  certified  copy  of  the  order  authorizing  or  ratifying 

such  sale  to  be  filed  in  the  office  of  the  recorder  of  the  county 

Superintendent  may  in  which  the  Said  real  property  is  located.    The  superintend- 

appoint  deputy  ^^^  ^f  ^^^y^^  ^       ^^^^^  j^j^  '^^^^  ^^^  official  scal,  appoint 

XO  aSSlSw 

in  uquidation  ouc  or  morc  Special  deputy  superintendents  of  banks,  as  agent 


STATE    BANKING    DEPARTMENT  89 

or  agents,  with  the  powers  specified  in  the  certificate  of  ap-  involuntary  disso- 
pointment  hereinafter  mentioned,  to  assist  him  in  the  duty  of        <>"— ^o"  »""« 
liquidation  and  distribution,  the  certificate  of  appointment  to  Superintendent  may 
be  filed  in  the  office  of  the  superintendent  of  banks,  and  a  cer-  depu^y^  ^  les  o 
tified  copy  in  the  office  of  the  clerk  of  the  county  in  which  the 
principal  office  of  such  bank  is  located. 

The  superintendent  of  banks  may  from  time  to  time,  by 
a  certificate  of  appointment  under  his  hand  and  official  seal, 
specifying  the  powers  conferred,  authorize  a  special  deputy 
superintendent  to  perform  such  duties  connected  with  such 
liquidation  and  distribution  as  the  superintendent  of  banks 
may  deem  proper.  Such  certificate  of  appointment  shall  be 
filed  in  the  office  of  the  superintendent  of  banks  and  a  cer- 
tified copy  in  the  office  of  the  clerk  of  the  county  in  which 
the  principal  office  of  such  bank  is  located.    The  superin-  Superintendentmay 

-.<.-,  ,  -  -  ,  employ  such  counsel 

tendent  of  banks  may  employ  such  counsel  and  procure  land  expert  assist- 

such  expert  assistance  and  advice  as  may  be  necessary  in  anceasmaybe 

the  liquidation  and  distribution  of  the  assets  of  such  bank,  uquidation 

and    for    that    purpose    may    retain    such    of   the   officers 

or  employees  of  such   bank  as   he   may   deem   necessary. 

The     superintendent     of     banks     shall     require     from     a 

special    deputy    superintendent    and    from    such    assistants 

such    security   for   the    faithful    discharge   of   their   duties 

as  he  may  deem  proper.     The  superintendent  of  banks  shall  Superintendent  to 

.  .  publish  and'mail 

cause  notice  to  be  given  by  advertisement,  in  such  newspapers   notice  to  creditors 
as  he  may  direct,  weekly  for  three  consecutive  months,  callinsr  *°  present  and  prove 

'  <=>     claims  against  bank 

on  all  persons  who  may  have  claims  against  such  bank  to 
present  the  same  to  the  superintendent  of  banks,  and  make 
legal  proof  thereof  at  a  place  and  within  a  time,  not  earlier 
than  the  last  day  of  publication,  to  be  therein  specified.  The 
superintendent  of  banks  shall  mail  a  similar  notice  to  all  per- 
sons whose  names  appear  as  creditors  upon  the  books  of  the 
l     bank.     If  the  superintendent  of  banks  doubts  the  justice  and  Action  upon  rejected 

*  ..  ..  .  ,    .         ,  .  ,  ,  .         claim — when  must 

validity  of  any  claim,  he  may  reject  the  same,  and  serve  notice  be  brought  by 
of  such  rejection  upon  the  claimant,  either  by  mail  or  person-  ^^^^^ 
ally.    An  affidavit  of  the  service  of  such  notice,  which  shall  be 
prima  facie  evidence  thereof  shall  be  filed  with  the  superin- 
tendent of  banks.    Any  action  upon  a  claim  so  rejected  must 
be  brought  within  six  months  after  such  service.    Claims  pre- 


90  CALIFOKNIA  BANK  ACT 

invoiuntery  disso-  sented  after  the  expiration  of  the  time  fixed  in  the  notice  to 

o  —con  in  e    ^.j-g^^j^Qj-g  gj^^jj  ^^  entitled  to  share  in  the  distribution  only  to 

the  extent  of  the  assets  in  the  hands  of  the  superintendent  of 

Superintendent  to  banlcs  equitably  applicable  thereto.     Upon  taking-  possession 

make  and  file  in-        ,     ,  ,  o    r- 

ventory  of  assets  o*  the  property  and  assets  of  any  bank,  the  superintendent  of 
banks  shall  make  an  inventory  of  the  assets  of  such  bank  in 
duplicate,  one  to  be  filed  in  the  office  of  the  superintendent  of 
banks,  and  one  with  the  papers  in  said  proceeding  in  the  of- 
fice of  the  clerk  of  the  county  in  which  the  principal  office  of 
such  bank  is  located ;  upon  the  expiration  of  the  time  fixed  for 
Superintendent^  the  presentation  of  claims  the  superintendent  of  banks  shall 
clerk  Ust  of  daims  iTiakc  in  dupHcatc  a  full  and  complete  list  of  the  claims  pre- 
presented.  specify-  scutcd,  including  and  Specifying  such  claims  as  have  been  re- 

ing  claims  rejected     .  ,,,.  i,-ii.i  n--  /•» 

jected  by  him,  one  to  be  filed  in  the  office  of  the  superintend- 
ent of  banks,  and  one  with  the  papers  in  said  proceeding  in 
the  office  of  the  clerk  of  the  county  in  which  the  principal 
Supplemental  lists  officc  of  such  bank  is  located.  Thereafter  he  shall  make  and 
file  in  said  offices  as  above  provided  at  least  fifteen  days  be- 
fore each  application  to  the  court  for  leave  to  declare  a  divi- 
dend a  supplemental  list  of  the  claims  presented  since  the  last 
preceding  list  was  filed,  including  and  specifying  such  claims 
as  have  been  rejected  by  him,  and  in  any  event  he  shall  make 
and  file  as  above  provided  such  a  list  at  least  once  every  six 
months  after  the  filing  of  the  original  list,  as  long  as  he  shall 
remain  in  possession  of  the  property  and  business  of  any  such 
bank.  Such  inventory  and  list  of  claims  shall  be  open  at  all 
Compensation  of  reasonable   times   to    inspection.      The   compensation   of   the 

special  deputies  and  .    ,      ,  •  i  111  t 

other  employees  and  spccial  dcputy  Superintendents,  counsel  and  other  employees 
au  expenses  of  su-  ^j^^j  assistants,  and  all  expenses  of  supervision  and  liquidation, 

pervision — how  to      ,,,--,,  ,  .  ,  r   1        1  1      1     11 

be  fixed  and  paid  shall  be  fixed  by  the  superintendent  of  banks  and  shall  upon 
and  reported  ^]^g  certificate  of  the  superintendent  of  banks  be  paid  out  of  the 
funds  of  such  bank  in  the  hands  of  the  superintendent  of  banks. 
All  such  expenses  must  be  reported  by  the  superintendent 
of  banks  to  the  superior  court  of  the  county  where  the  prin- 
cipal place  of  business  of  such  bank  is  located  and  settled 

^°"  how  dlpost^  ^y  ^"^^  ^°"^*  "P°^  ^^^^^^  *°  ^^^^  ^^^^-  ^^^  moneys  col- 
lected by  the  superintendent  of  banks  shall  be  from  time  to 
time  deposited  in  one  or  more  state  banks  of  deposit,  savings 
banks  or  trust  companies,  and,  in  case  of  the  suspension  or 


STATE  BANJOUQ   DEPAETMENT  91 

insolvency  of  the  depositary,  such  deposits  shall  be  preferred  involuntary  dis»o- 

before  all  other  deposits.     At  any  time  after  the  expiration  such  d^ts"""*** 

of  the  date  fixed  for  the  presentation  of  claims  the  superior  given  preference 
court  may  by  order  authorize  the   superintendent   of  banks 

to  declare  out  of  the  funds  remaining  in  his  hands  after  the  Declaration  of 

payment  of  expenses  one  or  more  dividends,  and  after  the  pa^iai  and  final 

dividends — how 

expiration  of  one  year  from  the  first  publication  of  notice   made 
to  creditors  he  may  declare  a  final  dividend,  such  dividends 
to  be  paid  to  such  persons,  and  in  such  amounts,  and  upon 
such  notice,  as  may  be  directed  by  the  superior  court  of  the 
county  in  which  the  principal  office  of  such  bank  is  located,   objections  by  inter- 
Objections  to  any  claim  not  rejected  by  the  superintendent   no\tejl^?eVby  stpt 
of  banks  may  be  made  by  any  party  interested  by  filing  a  copy   to  be  heard  and  dis. 
of  such  objections  with  the  superintendent  of  banks,  who  shall  orTelrL*''' '°'''' 
present  the  same  to  the  superior  court  at  the  time  of  the  next 
application  to  declare  a  dividend.     The  court  to  which  such 
application  is  made  shall  thereupon  dispose  of  said  objections   Court  to  make 
or  may  order  a  reference  for  that  purpose,  and  should  the   proper  provision 

.  ,    .         ^  .  lOr  unproved  or  un- 

objections  to  any  claim  be  sustained  by  the  court  or  by  the  claimed  deposits 
referee,  such  claim  shall  not  be  allowed  by  the  superintendent 
of  banks  until  the  claimant  shall  have  established  his  claim  by 
the  judgment  of  a  court  of  competent  jurisdiction.  The  court 
must  make  proper  provision  for  unproved  or  unclaimed  de- 
posits. 

Should  any  bank  at  the  time  the  superintendent  of  banks   Bailors  of  property 
takes  possession  of  its  property  and  business,  have  in  its  pos-  tobrnotmedby 
session,  as  bailee  for  safekeeping  and  storage,  any  jewelry,   Superintendent  to 
plate,  money,  specie,  bullion,  stocks,  bonds,  securities,  valuable 
papers  or  other  valuable  personal  property  or  should  it  have 
rented  any  vaults,  safes  or  safe  deposit  boxes  or  any  portion 
ther  of  for  the  storage  of  property  of  any  kind,  the  super- 
intendent of  banks  may  at  any  time  thereafter  cause  to  be 
mailed  to  the  person  claiming  to  be  or  appearing  upon  its 
books  to  be  the  owner  of  such  property,  or  the  person  in  whose 
name  the  safe,  vault  or  box  stands,  a  notice  in  writing  in  a 
securely  closed,  postpaid  registered  letter,  directed  to  such 
person  at  his  post  office  address  as  recorded  upon  its  books, 
notifying  such  person  to  remove,  within  a  period  fixed  by 
said  notice  and  not  less  than  sixty  days  from  the  date  thereof, 


remove  property 


92  CALIFOENIA  BANK  ACT 

Involuntary  disso-  all  such  personal  property  and  upon  the  date  fixed  by  said 
lution— continued  j^^^j^^g^  ^^^  Contract,  if  any,  between  such  person  and  bank 
for  the  storage  of  said  property  or  for  the  use  of  the  said 
safe,  vault  or  box  shall  cease  and  determine,  and  the  amount 
of  the  unearned  rent  or  charges,  if  any,  paid  by  such  person 
If  such  property  not  shall  bccome  a  debt  of  the  bank  to  said  person.    If  the  prop- 
removed  within  time  gj.^    |3g  j^Q^  removed  within  the  time  fixed  by  the  notice,  the 

fixed  by  notice,  "^  ■'  ' 

Supt.  to  dispose  of  Superintendent  of  banks  may  make  such  disposition  of  said 
same^as^ourt  property  as  the  superior  court,  upon  application  thereto,  shall 
direct.    And  the  superintendent  of  banks  may  cau^e  any  safe, 
Superintendent  may  vault    or    box    to    be    Opened    in    his    presence    or    in    the 
''or  boxTo  bfop^ntd  prcsencc  of  one  of  the  special  deputy  superintendents  of  banks, 
and  its  contents  and  of  a  uotary  public  not  an  officer  or  in  the  employ  of  the 
*^^^specified  bank  or  of  the  superintendent  of  banks,   and  the  contents 
thereof,  if  any,  to  be  sealed  up  by  such  notary  public  in  a  pack- 
age upon  which  such  notary  public  shall  distinctly  mark  the 
name  and  address  of  the  person  in  whose  name  such  safe, 
vault  or  box  stands  upon  the  books  of  the  bank  and  shall  at- 
tach thereto  a  Hst  and  description  of  the  property  therein; 
and  the  package  so  sealed  and  addressed,  together  with  the  list 
and  description,  may  be  kept  by  the  superintendent  of  banks 
in  one  of  the  general  safes  or  boxes  of  the  bank  until  delivered 
to  the  person  whose  name  it  bears,  or  until  otherwise  dis- 
Bank  deeming  itself  poscd  of  as  directed  by  the  court.    Whenever  any  such  bank 
aggrieved  may  en-  ^f  whose  property  and  business  the  superintendent  of  banks 

join  proceedings  ,  .  ^  .  i       /  •        ,  r  •  j 

within  ten  days  has  taken    possession    as    aforesaid,   deems  itself  aggrieved 
after  Supt.  takes  thereby,  it  may,  at  any  time  within  ten  days  after  such  taking 

possession  •' '  •' '  •'  -^  ... 

possession,  apply  to  the  superior  court  in  the  county  in  which 
the  principal  office  of  such  bank  is  located  to  enjoin  further 
proceedings;  and  said  court,  after  citing  the  superintendent 
of  banks  to  show  cause  why  further  proceedings  should  not 
Hearing  to  be  had  be  eujoiucd,  and  hearing  the  allegations  and  proofs  of  the 
b^'llteredtherein  P^^tics  and  determining  the  facts  may,  upon  the  merits,  dis- 
miss such  application  or  enjoin  the  superintendent  of  banks 
from  further  proceedings,  and  direct  him  to  surrender  such 
Provisions  concern-  busiucss  and  property  to  such  bank.    An  appeal  as  above  pro- 
mg  appeaHrom  ^j^^g^  gj^^jj  Operate  as  a  stay  of  the  judgment  of  the  superior 
court,  and  no  bond  need  be  given  if  the  appeal  be  taken  by 
the  superintendent  of  banks;  but  if  the  appeal  be  taken  by 


STATE    BANKING    DEPAETMENT  93 

such  bank,  a  bond  shall  be  given,  as  required  by  section  nine   involuntary  disso- 
hundred  forty-three  of  the  Code  of  Civil  Procedure.    When-  ISter "p^r" ""^ 
ever  the  superintendent  of  banks  shall  have  paid  to  each  and  allowed  claims,  etc.. 
every  depositor  and  creditor  of  such  bank  whose  claim  or  of'stlkhofde^^^^^^^ 
claims  as   such  creditor  or  depositor   shall   have  been   duly  determine  whether 
proved  and  allowed,  the  full  amount  of  such  claims,  and  shall  uq^daton  TaSnt 
have  made  proper  provision  for  unclaimed  and  unpaid  de-  be  elected  for  that 
posits  or  dividends,  and  shall  have  paid  all  the  expenses  of  the  p'''^°^ 
liquidation,  the  superintendent  of  banks  shall  call  a  meeting 
of  the  stockholders  of  such  bank  giving  notice  thereof  for 
thirty  days  in  one  or  more  newspapers  published  in  the  county 
where  the  principal  office  of  such  bank  is  located.     At  such 
meeting  the  stockholders  shall  determine  whether  the  super- 
intendent of  banks  shall  be  continued  as  liquidator  and  shall 
wind  up  the  affairs  of  such  bank,  or  whether  an  agent  or 
agents  shall  be  elected  for  that  purpose,  and  in  so  determining 
the  said  stockholders  shall  vote  by  ballot,  in  person  or  by   Manner  of  voting 
proxy,  each  share  of  stock  entitling  the  holder  to  one  vote,   ^*^"^  meeting 
and  the  majority  of  the  stock  shall  be  necessary  to  a  determi- 
nation. 

In  case  it  is  determined  to  continue  the  liquidation  under   Completion  of 
the  superintendent  of  banks,  he  shall  complete  the  liquidation    ^^^  ^  ^°"' 
of  the  affairs  of  such  bank,  and  after  paying  the  expenses   (i)  i^  ^y  Supt. 
thereof,  shall  distribute  the  proceeds  among  the  stockholders 
in  proportion  to  the  several  holdings  of  stock  in  such  manner 
and  upon  such  notice  as  may  be  directed  by  the  superior  court. 
In  case  it  is  determined  to  appoint  an  agent  or  agents    to   (2)  if  by  agent 
liquidate,  the  stockholders  shall  thereupon  select  such  agent 
or  agents  by  ballot,  a  majority  of  the  stock  present  and  voting, 
in  person  or  by  proxy,  being  necessary  to  a  choice.     Such 
agent  or  agents  shall  execute  and  file  with  the  superintendent  Agent  shall  execute 
of  banks  a  bond  to  the  people  of  the  state  in  such  amount, 
with  such  sureties  and  in  such  form  as  shall  be  approved  by 
the  superintendent  of  banks,  conditioned  for  the  faithful  per- 
formance of  all  the  duties  of  his  or  their  trust,  and  thereupon 
the  superintendent  of  banks  shall  transfer  and  deliver  to  such  Superintendent  shall 
agent  or  agents  all  the  undivided  and  uncollected  or  other  a^tsTo'^agent 
assets  of  such  bank  then  remaining  in  his  hands;    and  upon 
such  transfer  and  delivery,  the  said  superintendent  of  banks 


94  OALIFOBNIA  BANK  ACT 

DUsoiution—  shall  be  discharged  from  any  and  all  further  liability  to  such 

bank  and  its  creditors.     Such  agent  or  agents  shall  convert 

Agent  to  convert  the  assets  coming  into  his  or  their  possession  into  cash,  and 

4  Tnd  ^count'forTnd  shall  account  for  and  make  distribution  of  the  property  of  said 

distribute  property  ^^nk  as  is  hcrciu  provided  in  the  case  of  distribution  by  the 

superintendent   of   banks,   except   that   the   expenses   thereof 

shall  be  subject  to  the  direction  and  control  of  a  court  of  record 

of  competent  jurisdiction.     In  case  of  the  death,  removal  or 

refusal  to  act  of  any  such  agent  or  agents,  the  stockholders, 

on  the  same  notice,  to  be  given  by  the  superintendent  of  banks 

upon  proof  of  such  death,  removal  or  refusal  to  act  being 

filed  with  him,  and  by  the  same  vote  hereinbefore  provided, 

may  elect  a  successor,  who  shall  have  the  same  powers  and  be 

subject  to  the  same  liabilities  and  duties  as  the  agent  originally 

Disposition  of  divi-  elected.     Dividends  and  unclaimed  deposits  remaining  unpaid 

^depo^s^tsremaiSng  ^^  ^^^  hauds  of  the  Superintendent  of  banks  for  six  months 

unpaid  six  months  after  the  ordcr  for  final  distribution  shall  be  by  him  deposited 

^^^'^  °£Sributk)n  w^*^  ^^^  ^^^^^  treasurer  in  the  same  manner  and  subject  to  the 

same  disposition  as  provided  for  in  section  one  thousand  two 

hundred  thirty-four  of  the  Code  of  Civil  Procedure.     The 

superintendent  of  banks  may  pay  over  the  moneys  so  held  by 

him  to  the  persons  respectively  entitled  thereto  upon  being 

furnished  satisfactory  evidence  of  their  right  to  the  same.    In 

cases  of  doubt  or  conflicting  claims  he  may  require  an  order  of 

the  superior  court    authorizing    and    directing    the    payment 

thereof. 

Bank  ceasing  busi-         Sec.  136a.     Any  bank  which  has  ceased  to  do  a  banking 
ness  shall  imme-  busiucss   whether   through   voluntary   action   on   its   part   or 

diately  liquidate  ^  -^        .  i      n     • 

through  expiration  of  its  corporate  existence,  shall  immedi- 
ately liquidate  its  aflfairs  :  id  any  unclaimed  deposits  or  divi- 
dends shall  be  paid  into  the  state  treasury  in  the  manner  and 
for  the  purposes  provided  in  section  one  hundred  thirty-six  of 
If  liquidation  un-  this  act  within  six  months  after  the  date  such  bank  ceased  to 
^tupt^'mfyta^ke  conduct  a  banking  business,  and  in  case  the  superintendent 
possession  and  of  bauks  shall  havc  reason  to  conclude  that  the  liquidation  of 
uquidate  g^^j^  ^^^^  j^  ^^^  being  safely  or  expeditiously  conducted,  he 
may  take  possession  of  the  property  of  such  bank  and  liquidate 
its  affairs  in  the  same  manner  as  provided  in  section  one  hun- 


STATE    BANKING    DEPARTMENT  95 

dred  thirty-six  of  this  act.     Whenever  any  bank  of  whose  Dissolution— 

■j  continued 

property  the  superintendent  of  banks  has  taken  possession  as 

aforesaid,  deems  itself  aggrieved  thereby,  it  may  within  the  Bank  deeming  itseii 

time  and  in  like  manner  and  effect  as  provided  in  section  one  ventiorof^sup"T' 

hundred  thirty-six  of  this  act  apply  to  the  superior  court  to  may  apply  for 

.    .  ,  injunction 

enjom  further  proceedmgs. 

Sec.   136b.     In  any  action  or  proceeding  brought  under  jurisdiction  vested 
any  provision  of  this  act,  exclusive  original  jurisdiction  shall  counfyThere  prin- 
be  vested  in  the  superior  court  of  the  county  in  which  is  lo-   cipai  place  of  busi- 
cated  the  prinicipal  place  of  business  of  the  bank  affected  J^^cated 
thereby,  and  all  proceedings  relating  to  the  same  matter, 
under  any  provision  of  this  act,  including  proceedings  for 
liquidation  of  the  affairs  of  any  such  bank,  shall  be  filed  with 
and  treated  as  a  part  of  the  record  in  such  original  pro- 
ceedings,  and   all   papers   relating  to  any  such   action  or 
proceeding,  including  the  copy  of  certificate  of  appointment 
of  any  special  deputy  and  the  inventories  required  to  be 
filed  in  the  matter  of  any  such  liquidation,  shall  be  filed 
with  and  made  a  part  of  the  record  of  such  original  pro- 
ceeding, without  the  payment  of  any  additional  fees  there- 
for, and  in  any  such  action  no  damage  may  be  awarded, 
but  the  action  otherwise  shall  be  tried  and  determined  accord- 
ing to  the  provisions  of  the  Code  of  Civil  Procedure. 

Sec.  137.  1.  Any  bank  shall  have  the  right,  on  appli-  Voluntary  dissoiu- 
cation  of  the  stockholders  or  members  to  apply  to  the  superior  under  provisions  of 
court  of  the  county  wherein  its  principal  place  of  business  is   CodeofCivii 

1  1-         1  -11         ,-1  '  1     -i    r         '        Procedure 

situated,  to  dissolve  said  bank  in  the  manner  provided  for  in 
title  six,  part  three  of  the  Code  of  Civil  Procedure. 

2.     At  the  expiration  of  four  months  after  the  settlement  Payment  to  county 
of  the  final  account  of  the  receiver  of  any  bank  appointed  prior  f^nds  by  receiver 
to  July  1,  1909,  any  dividends  due  depositors,  or  other  cred-   appointed  prior  to 
itors,  or  stockholders  of  such  bank  and  remaining  unpaid  or 
uncalled  for  and  in  the  hands  of  such  receiver  may  be  paid  by 
him  into  the  treasury  of  the  county  in  which  such  bank  is  situ- 
ated which  money  shall  be  held  in  the  treasury  of  said  county, 
and  at  the  same  time  it  shall  be  the  duty  of  such  receiver  to 
furnish  to  the  county  treasurer  of  said  county  a  list  of  names 
of  all  depositors  or  other  persons  to  whom  such  money  belongs 


96  CALIFOENIA  BANK  ACT 

or  who  are  entitled  thereto  and  thereupon  such  receiver  shall 

be  entitled  to  his  discharge. 

Said  funds  to  be        3.     The  moneys  referred  to  in  subdivision  two  of  this  sec- 

cottt°oli°er  tion  ^hall  be  paid  out  on  the  order  of  the  court  appointing  such 

receiver. 

When  such  funds        4.     All  moueys  paid  under  subdivision  two  of  this  section, 

escheat  to  state  uncalled  for  within  five  years  after  being  paid  in,  shall  by 

operation  of  law,  and  without  action  had,  escheat  to  the  state. 

All  moneys  held  by  any  county  treasurer  under  subdivision 

two  of  this  section,  when  such  moneys  have  escheated  to  the 

state  as  hereinbefore  provided,  shall  be  paid  by  the  county 

treasurer  into  the  state  treasury,  and  thereafter  only  be  drawn 

out  in  such  manner  as  may  be  provided  for  by  law  for  the 

estates  of  deceased  persons  escheated  to  this  state. 

Investment  of         5.     The  State  board  of  control  must  invest  such  moneys  in 

the  same  manner  that  the  state  school  land  fund  is  invested  as 

provided  by  law.  But  any  claimant  shall  be  entitled  to  recover 

as  herein  provided  only  the  principal  so  paid  into  the  state 

treasury. 

Failure  to  make        Sec.  138.     If  any  bank  shall  fail  to  make  any  report  re- 

^^^V  siJ^i3o  OT  ^^^^^^  by  the  provisions  of  section  one  hundred  thirty  or  one 

Sec.  130a  hundred  thirty-a  of  this  act,  within  ten  days  from  the  day 

designated  for  the  making  thereof  by  the  superintendent  of 

banks,  or  to  include  therein  any  matter  required  by  the  pru- 

Penaity  visious  of  either  of  said  sections,  it  shall  forfeit  to  the  people 

of  the  state  the  sum  of  one  hundred  dollars  for  each  day  that 

any  such  report  shall  be  so  delayed  or  withheld  by  the  failure 

or  neglect  of  such  bank. 

In  event  of  such         ^^  ^hc  cvcut  of  the  failure  of  any  such  bank  to  make  any 

fauure,  Supt.  may  such  rcport  required  from  it,  the  superintendent  of  banks  may, 

make  examination    .       -  .        - .  , .  .  <  •    ,    i  >  i        i        i  j 

at  bank's  expense  ^^  ^is  discretion,  immediately  cause  the  books,  papers  ana 
affairs  of  such  bank  to  be  examined  at  the  expense  of  such 
bank. 

Directors  shall         Sec.  139.     It  shall  be  the  duty  of  the  board  of  directors  of 
examine  bank  every  bank  to  examine  fully  into  the  books,  papers  and  affairs 
of  the  bank  of  which  they  are  directors,  and  particularly  into 
the  loans  and  discounts  thereof,  with  a  special  view  to  ascer- 
taining the  value  and  security  thereof,  and  of  the  collateral 


STATE    BANKING    DEPARTMENT  97 

security,  if  any  given,  in  connection  therewith,  and  into  such  ^gf^^***®"*  *"** 
other  matters  as  the  superintendent  of  banks  may  require; 
such  examination  to^be.  made  at  least  once  a  year,  but  no  such 
subsequent  yearly  examinations  shall  be  made  within  three 
months  of  the  next  preceding  examination.       Such  directors   Directors  may  em- 
shall  have  power  to  employ  such  assistance  in  making  such  ^Xngex^'natiori 
examinations  as  they  may  deem  necessary.  Within  ten  days 
after  the  completion  of  such  examination,  a  report  in  writing  Swom  report  of 

1     1,    ,        directors  to  be  mada 

thereof,  sworn  to  by  the  directors  makmg  the  same,  shall  be  and  filed  with 
mad3  by  the  board  of  directors  of  such  bank,  and  placed  on  file  ^«<=°^ds  °f  tank 
with  the  records  of  said  bank,  and  shall  be  subject  to  examin- 
ation by  the  superintendent  of  banks. 

Such  report  shall  particularly  contain  a  statement  of  the  What  such  report 
assets  and  liabilities  of  the  bank  examined,  as  shown  by  its 
books,  together  with  any  deductions  from  the  assets,  or  addi- 
tions to  liabilities,  which  such  directors  or  committee,  after 
such  examination,  may  determine  to  make.  It  shall  also  con- 
tain a  statement,  in  detail,  of  loans,  if  any,  which  in  their 
opinion  are  worthless  or  doubtful,  together  with  their  reasons 
for  so  regarding  them;  also  a  statement  of  loans  made  on 
collateral  security,  which  in  their  opinion  are  insufficiently 
secured,  giving  in  each  case  the  amount  of  the  loan,  the  name 
and  market  value  of  the  collateral,  if  it  has  any  market  value, 
and,  if  not,  a  statement  of  that  fact,  and  its  actual  value  as 
nearly  as  possible.  Such  report  shall  also  contain  a  statement 
of  overdrafts,  of  the  names  and  amounts  of  such  as  they  con- 
sider worthless  or  doubtful,  and  a  full  statement  of  such  other 
matters  as  affect  the  solvency  and  soundness  of  the  bank. 

If  the  directors  of  such  bank  shall  fail  to  make  such  exam-  if  directors  fau  to 
ination  or  fail  to  cause  it  to  be  made,  or  shall  fail  to  file  such  ^otor  report!Spt" 
report  of  such  examination  in  the  manner  and  within  the  time  may  make  extra 
specified,  the  superintendent  of  banks  shall  have  authority  to  ^^^ 
make  or  cause  to  be  made  an  extra  examination  of  such  bank, 
at  the  expense  of  such  bank. 

Sec.  140.    The  superintendent  of  banks  shall  report  during  Superintendent  shaii 
the  month  of  October  of  each  year,  to  the  governor,  for  sub-  ""^^  ^""""^^  '^^^ 

.      .  .  .  -  to  Governor 

mission  to  the  next  ensuing  session  of  the  legislature: 


examination  at 
s  expense 


98  CALIFOENIA  BANK  ACT 

Report  by         1.   A  summary  of  the  state  and  condition  of  every  bank 

upennten  ent  j-gq^jj-^^j  ^q  report  to  him,  and  from  which  reports  have  been 

Annual  report  rcccivcd  the  preceding  year,  with  an  abstract  of  the  whole 

shall  contain:  ^mount  of  Capital  returned  by  them,  the  whole  amount  of  their 

debts  and  liabilities,  and    the    total    amount    of    means    and 

Summary  of  rcsourccs,  Specifying  the  amount  of  specie  held  by  them  at  the 

general  conditions    ^^^^  ^f  ^^^  j^^^   ^.^p^^^  ^^  ^^^^   ^^^   ^^^^  ^^^^^  information   in 

relation  to  such  banks  as,  in  his  judgment,  may  be  useful. 

Statement  of  2.  A  Statement  of  all  banks  authorized  by  him  to  do  busi- 
new  banks  ^^^^  during  the  previous  year,  with  their  names  and  locations 
and  dates  of  incorporation,  and  particularly  designating  such 
as  have  commenced  business  during  the  year. 

Statement  of         3.    A  Statement  of  the  banks  whose  business  has  been  closed 

closed  banks  during  the  year. 

Desirable  amend-         4.     Any  amendments  to  the  banking  law,  which,  in  his 
ments  to  Bank  Act  judgment,  may  be  desirable. 

Names  and  compen-         5.    The  uamcs  and  compcusatiou  of  all  persons  employed 
sation  of  employees  ^y  j^jj^^  ^^^  ^^le  wholc  amount  of  the  receipts  and  expenses  of 
the  department  during  the  year. 
Data  concerning         6.    The  uamcs  of  bauks  placcd  in  his  hands  in  process  of 
banks  in  liquidation  liquidation,  and  the  amount  of  dividends  paid  thereon. 
Number  of  copies         Such  rcport,  and  the  usual  number  of  copies  for  the  use  of 
of  report  printed  ^^^  legislature,  shall  be  printed  and  in  readiness  for  distribu- 
tion by  the  state  printer,  and  one  thousand  copies  shall  be 
printed  for  the  use  of  the  department,  the  expense  of  which 
shall  be  charged  among  the  general  expenses  of  the  depart- 
ment. 
Weekly  bulletin  to         Sec.  141.    1.    The  Superintendent  of  banks  shall  keep  in  his 
be  publicly  posted  office,  in  a  place  accessible  to  the  general  public,  a  bulletin 

in  Superintendent  s  '  r  -^  -r^  .  . 

office  board  upon  which  he  shall  cause  to  be  posted  at  noon  on  Friday 
of  each  week  a  detailed  statement,  signed  by  him  or,  in  case 
Contents  of  buUetin  of  his  abscucc  from  San  Francisco  or  inability  to  act,  by  the 
deputy  superintendent  in  charge,  giving  the  following  items  of 
general  information  with  regard  to  the  work  of  the  department 
since  the  preceding  statement : 

(a)  The  name  of  every  bank  that  has  filed  in  the  banking 

Applications  filed,      ,  ,.         .  .  <        •       .•  .  t,    „• 

etc.  department  an  application  for  authorization  to  commence  busi- 
ness, its  location  and  the  date  of  filing  of  such  application. 


STATE  BANKING  DEPAETMBNT  99 

(b)  The  name  and  location  of  every  bank  authorized  by  the  Superintendent's 

.  ,  r    ,        ,  i        •  •  ..1     weekly  bulIeUn— 

superintendent  of  banks  to  commence  busmess,   its   capital,  continued 
surplus,  and  the  date  of  authorization.  ^^^  ^^^^ 

(c)  The  name  of  every  bank  to  which  a  certificate  of  authorized 
authorization  has  been  refused  by  the  superintendent  of  banks,  certificates  refused 
and  the  date  of  notice  of  refusal. 

(d)  The  name  and  residence  of  every  person  appointed  by  New  employees,  etc 
the  superintendent  of  banks  as  a  deputy,  examiner  or  employee 

in  the  banking  department,  the  title  of  the  office  to  which 
appointed,  the  compensation  paid,  and  the  date  of  appoint- 
ment. 

(e)  The  date  on  which  a  call  for  a  report  by  banks  was   Dates  concerning 

r  1        1  iii-i.  called  reports. 

issued  by  the  superintendent  of  banks,  and  the  day  designated 
as  the  day  with  reference  to  which  such  report  should  be  made. 

(/)  The  name  and  location  of  every  bank  whose  creditors  Concerning  banks 

'  "^  .  •  J  r    ""^hos^  creditors  are 

or  depositors  have  been  paid  in  full  by  the  superintendent  of  paid  and  stockhoid- 
banks  and  a  meeting  of  whose  stockholders  shall  have  been  ^""^  "^'^^  ^^^^ 
called,  together  with  date  of  notice  of  meeting  and  date  of 
meeting. 

(g)  The  name  and  location  of  every  bank  subject  to  the  Banks  Uquidated 
banking  law  whose  affairs  and  business  shall  have  been  finally  °^  ^^"^  ^*^°^ 
liquidated,  or  in  course  of  liquidation. 

(h)  The  name  and  location  of  every  bank  which  has  applied  Proposed  changes 
for  approval  of  a  change  of  name,  and  the  name  proposed.        mname 

2.    Every  such  bulletin,  after  having  been  posted  as  afore-  Bulletins  after  being 
said  for  one  week,  shall  be  placed  on  a  file  for  such  statements,  ^^^^^  *°  ^^  ^^^^ 
to  be  kept  in  the  office  of  the  superintendent  of  banks.     All 
such  statements  shall  be  public  documents,  and  at  all  reason- 
able times  shall  be  open  to  public  inspection  during  usual  bank- 
ing hours. 

Sec.  142.    Every  official  report  made  by  the  superintendent  Reports  to  be 
and  every  report  duly  verified  of  an  examination  made,  shall  in'^c^^urt*'^*^  ^^^  ^^^^ 
be  prima  facie  evidence  of  the  facts  therein  stated,  for  all 
purposes  in  any  action  or  proceedings  wherein  such  bank  is  a 
party. 

(Sec.  143.    Repealed  1913.) 


100  CALTFOBNIA  BAME  ACT 

Penalties  and  for-  Sec.  144.  Whenever  by  the  terms  of  this  act  a  penalty  or 
act— how  recovered  forfeiture  is  imposed,  the  same  shall  be  recovered  in  an  action 
brought  at  the  request  of  the  superintendent  of  banks  by  the 
attorney  general,  in  the  name  of  the  people  of  the  state,  and 
the  sum  recovered  shall  be  paid  into  the  state  banking  fund 
and  used  in  payment  of  claims  against  the  said  fund. 

Powers,  duties,  etc..        Sec.  145.     The  powcrs,  privileges,  duties  and  restrictions 
tu'SneL'urd^er^raws  Conferred  and  imposed  upon   any   corporation  or  individual 
of  this  state,  existing  and  doing  business  under  the  laws  of  this  state  are 
etc.,  to  conform  hereby  abridged,  enlarged  or  modified  as  each  particular  case 
to  act  j^^y  i-equii-e  to  conform  to  the  provisions  of  this  act,  notwith- 
standing anything  to  the  contrary  in  their  respective  articles 
Act  applies  equally  of  incorporation  or  charters.     All  the  provisions  of  this  act 

to  all  corporations    gJ^^JJ    ^ppjy    ^J^]^    gq^^l     f^j-^^g    ^^^    g£fg^^    ^q    ^jj    COrOOratioUS 
now  or  hereafter  i  i    •  i  •   i 

doing  banking  busi-  which  are  now  doing  or  which  may  hereafter  do  a  banking 
ness  in  this  state  busjness  in  this  statc,  except  where  express  exception  or  ex- 

unless  excepted  ^   ^  ^  '■ 

herein  cmptiou  may  be  made  herein.     The  legality  of  investments 

Legality  of  prior  heretofore  made,  or  title  to  property  heretofore  acquired  or 

or^ltbLTaScttd  conveyed  through  transactions  heretofore  had  by  any  bank 

by  act;  but  non-  pursuaut  to  any  provision  of  law  in  force  when  such  invest- 

compiying^invest-  ^^^^^      ^^^  ^^^^  ^^  trausactious  had,  shall  not  be  affected 

ments  made  prior  to  ' 

July  1, 1909.  to  be  by  the  provisions  of  this  act,  except  that  any  such  investments 
and'^LtXto  -"ade  prior  to  July  1.  1909,  when  not  complying  with  the 
conform  to  act,  etc.  provisious  hcrcof,  shall  be  changed  to  conform  hereto;  but 
such  change  shall  be  made  gradually  and  in  such  manner  as 
to  prevent  loss  or  embarrassment  in  the  business  of  such  bank, 
or  unnecessary  loss  or  injury  to  the  borrowers  on  such  se- 
curity; provided,  further,  that  in  any  event,  all  investments 
and  securities  and  excess  in  investments  made  prior  to  July 
1,  1909,  which  are  not  in  conformity  with  the  provisions  and 
spirit  of  this  act  and  which  have  been  acquired  and  are  now 
held  by  any  bank,  must  be  written  off  as  assets  of  such  bank 
prior  to  July  1,  1918;  and  no  bank  holding  any  such  invest- 
ments or  securities  acquired  prior  to  July  1,  1909,  shall,  after 
July  1,  1918,  be  permitted  to  pay  any  dividends  to  its  stockhold- 
ers until  it  shall  have  written  off  all  such  non-conforming  in- 
vestments or  securities ;  and  provided,  further,  that  the  legality 
of  any  investments  heretofore  lawfully  made,  pursuant  to  the 


STATE    BANKING    DEPARTMENT  101 

provisions  of  this  act  as  it  existed  on  and  subsequent  to  July  1,   LegaUty  of  invest- 
1909,    shall  not  be  affected  by  the  provisions  of  this  section.       ments  lawfully  made 

'  •'  ^  since  July  1,  1909, 

Sec.  146.    All  acts,  or  parts  of  acts,  in  conflict  with  this  act  "o*  effected  by  this 
are  hereby  repealed. 

Sec.  147.    This  act  shall  take  effect  July  first,  1909. 


statutes   of   1909: 
Chapter     76 Approved  Mar.    1 In  Effect  July     1. 

Amended  by  Statutes  of  1911: 

Chapter     11 Approved  Feb.     6.... In  Effect  Feb.      6. 

Chapter  488 Approved  Apr.  21.... In  Effect  June  20. 

Chapter  494 Approved  Apr.  21.... In  Effect  June  20. 

Chapter  495 Approved  Apr.  21 In  Effect  June  20. 

Amended  by  Statutes  of  1911   (Special  Session): 

Chapter       2 Approved  Dec.   18 In  Effect  Feb.    16. 

Chapter     24 Approved  Dec.   24 In  Effect  Feb.    22. 

Amended  by  Statutes  of  .1913: 

Chapter  104. ..  .Approved  May    9....  In  Effect  Aug.    10. 
Chapter  192. ..  .Approved  June    3.... In  Effect  Aug.    10. 


INDEX  TO  CALIFORNIA  BANK  ACT 


.   ^  ,.  Section 

Act,   applicable   to   certain  corporations 1 

bank,  repeals  all  acts  in  conflict 146 

effective  when    147 

title  of   1 

Action,  against  bank,  for  escheated  deposits 15 

against  bank,   reports  are  prima   facie  evidence 142 

against  superintendent  of  banks    134-136 

brought   under   bank   act,    jurisdiction   in 136B 

for  sale  of  real  estate,  when 54 

may  be  maintained  by  superintendent  of  banks  to  dissolve  bankl35A 

to  recover  penalties  by  Attorney  General 144 

Adjustment  of  investments  made  prior  to  this  act 145 

Administrator,   deposits   by : 51 

may  deposit   with   trust   company 91-92-93 

trust  company,   may   act   as 90 

trust   company,   oath    required 90 

Advertisement,   building  and  loan  associations  not  to  advertise  as 

savings   banks    12 

capital,  must  show  amount  paid  up 14 

for  deposits,  prohibited  when 12 

liabilities,  must  show  separate 14 

of  banks,   how  regulated 28 

of  merger    31A 

of  sale  of  bank 31 

of  unauthorized  banking  prohibited 12 A 

of  unauthorized  trust  company  prohibited 12 A 

resources   must   show   separate 14 

savings,  shall  not  be  advertised,  by  whom 49 

surplus  must  show  separate 14 

undivided  profits  must  show  separate 14 

Affidavit  by  guardian  to  be  accompanied  by  letters  of  guardianship.      16 

must  be  certified  by  Secretary  of  State 8 

must  be  filed  before  commencing  business 8 

reports    of    banks 130-130A 

reports    of   trust   companies 101 

when  filed  by  surviving  relative  or  guardian 16 

Agrent,   liability  for  fraud 38 

of  commercial  bank,  loan  to 83 

of  savings  bank — may  borrow  funds 65 

overdrafts    of — prohibited    39 

purchase  of  assets  of  bank,  by .42 

restriction  on  purchase  of  obligations  of  bank — by 41 

sale  of  mortgage  to  bank  by 35 

special  deputy  superintendent  of  banks  in  liquidating  bank 136 

superintendent  of  banks  for  service  in  foreign  bank 7 

Agreement  of  consolidation  must  be  filed 31A 

of  consolidation  must  have  approval 31A 

sale   and   purchase 31 

Amendment  of  articles  of  incorporation  must  be  filed 8 

Amortization  of  bonds  by  savings  banks 61 

Annexation,  as  affecting  powers  of  banks  and  branch  offices.  .  .23-60-82 

Annual  Report,  copies  for  distribution 140 

of  superintendent  of  banks,  to  contain  what 140 

Appeal  from  order  of  superintendent  of  banks 134-136 

from   seizure  of   bank  property 134-136 

Applications  to  do  banking  business,  investigation  of 128 

Appointment  of  appraisers ^^"^? 

of   special    deputy    superintendent    of   banks 136 

of  superintendent  of  banks 120 

Apportionment  of  capital  and  surplus  to  court  trust  business 90 

of  capital  and  surplus  to  departments 28 

of  capital  and  surplus  to  private    trust    business 90 


104  CALIFOENIA  BANK  ACT 

Section 
Appraisal  of  property  mortgaged  to  state  treasurer  by  trust  com- 
pany           99 

Appraisers,    appointment    of 61-99 

Articles  of  incorporation,  amendments  must  be  filed 8 

as  affected  by  bank  act 145 

may  provide  for  departmental  banking 22 

must  be  certified  by  secretary  of  state 8 

must  be  filed  with  superintendent  of  banks 8 

not  effective  until  filed 8 

of  trust  company 90 

on  consolidation  of  merger 31 A 

violation  of,    by   banks 134-135A-136 

when  filed   by   bank 128 

Assessment,  failure  of  bank  to  pay 123 

of  banks,  how  calculated 123 

of  banks,   for  state  banking  fund 123 

refusal  of  stockholder  to  pay 133 

stockholders   must   be  notified 138 

when   capital   stock   impaired • 138 

Assets,    commercial    bank    may    pledge    for    "borrowed   money,"    to 

what  extent 21A 

how  may  be  reached  in  merger 31 A 

invested  in  bonds 36-46 

of  banks,  relation  of  loans  thereto 44 

.  of  departments  held  for  depositors 27 

of  departments  may  be   transferred,   when 25 

of  departments  to  be  kept  separate 26 

overdrafts   limited  to  ninety  days 21 A 

purchased  by  directors,   officers   and  employees 42 

relation  of,   to   investments 36-46 

relation  of,  to  loans   by  savings   banks 67 

sale   and   purchase 31 

shall  not  be  mingled  with  trust  funds 32 

shall  not  be  pledged   to   give   preference 21 A 

Assignee,    deposits    by 51-91-98 

Assistants  of  state  banking  department 121 

Attorney,   designation  of  superintendent  of  banks   by   foreign  cor- 
porations           7 

may  be  employed  in  liquidating 136 

of  state  banking  department 121 

Attorney  General,  actions  brought  by,  to  recover  penalties 144 

duty  in  action  for  escheated  deposits 15 

Auditor,  superintendent  of  banks  shall  provide 124 

Authorization,  certificate  for  commercial  bank 128 

certificate  for  savings  bank 128 

certificate  for  trust  company 128 

of  loans  to  officers  and  directors  in  commercial  banks 83 

refusal  of,  by  superintendent  of  banks 128 

refusal  of,  by  superintendent  of  banks  for  branch  office 9 

Bad  debts,  compounding  of 136 

what   are 21A 

Balance,  sale  of  stock  for  assessment 133 

unclaimed    deposits    15 

Bank,  annual  report  of  superintendent  of  banks 140 

application   to   do   business 128 

articles  of  incorporation  must  be  filed 128 

as   a   borrower 21A 

assessed  for  state  banking  fund 128 

banking  corporations,  how   formed 8 

bond   investment   limited 86 

branch    office    9 

capital   impaired    188 

ceasing  business  must  take  what  action 136A 

classified  as  to  capital  by  population 23 

commercial,  purposes  of 5 

conducting  business  in  unsound  manner 134-135 A 

connection  with  by  superintendent  of  banks  prohibited 120 

considered    insolvent,    when 20 

definition    of 2 

departmental,  separate  books  to  be  kept 26 

departmental,  shall  make  reports  separately 129 

departmental,  shall  publish    statements    separately 129 

deposits  with,  does  not  create  debt,  when 55 

dissolution  of,  by  process  of  law 135A 

dissolved,   funds   of 137 

distribution  of  funds  of  Insolvent 136 


INDEX  105 

Section 

escheat  of  unclaimed  deposits 15 

examination  of,  before  issuance  of  certificate 127 

examination  of,  by  court 136 

examination  of,   by  directors 139 

examination  of,  once  a  year 124 

examination  of,  when  failing  to  report 138 

examiner,  failure  to  report  insolvent  condition 126 

examiner,  must  file  oath 125 

examiner,  shall  not  act  as  receiver  when 125 

expiration  of  corporate  existence 136A 

extra  examination,  expense  of 124 

failure  to  make   report,    penalty 138 

failure  to  pay  assessment 123 

foreign,   inspection  of 7~.   124 

forfeitures,    how   recovered 144 

funds,  when  deposited  with  other  banks 43 

impairment  of  capital 133-136 

in  liquidation,  names  posted 141 

insolvent  condition  of,  failure  to  report 126 

inspection  of,  by  superintendent  of  banks 124 

in    unsafe    condition 136 

investment  in  bonds  limited 46 

investments,  changed  to  conform  to  act 145 

investments  in  own  stock  prohibited 34 

license    to    foreign    corporations 7 

limited  time  to  repair  capital 183 

limited  time  to  report 138 

limited  to  Investment  in  safe  deposit 30 

liquidation  of,  by  superintendent  of  banks 136 

loans  on  own  stock  prohibited 34 

may  apply  to  court  to  dissolve 137 

may  be  cited  to  show  cause 134 

may  conduct   safe   deposit  department 30 

may  consolidate,    how 31A 

may  go  into  voluntary  liquidation 136A-137 

may  join  National  Reserve  Association 56 

may  purchase  real  estate,  when 61-84 

may  resume    business,    when 136 

must  have  certificate  of  superintendent  of  banks 24 

must  liquidate,   when 136A 

must  report  loans   to   directors 83 

mutual,  may  have  capital  stock 29 

names  of,  not  to  be  similar 127 

National,    examination    of 48 

new,  information  of,  to  be  posted 141 

obligations  of — when  purchased  by  officers,  directors  and  em- 
ployees          41 

penalties  imposed,  how  recovered 144 

publication  of  report  of 132 

publication   of  unclaimed   deposits 15 

purchase    of    31 

refusal  to  observe  order  of  superintendent  of  banks 136 

refusal  to   submit   books 185A-136 

report  of,  to  superintendent  of  banks 130 

rights  of  creditors  in  merger 31A 

sale  of   31 

savings,   purposes  of 4 

shall  not  own  stock  of  corporations 37 

shall  not  transact  business  without  certificate 127 

signs  must  show  business  conducted 28 

stationery  must  show  business  conducted 28 

stock,  as   collateral,   limited 44 

stock,  par  value,  minimum 53 

suspending  payment  of  obligations 135A 

trust  company,  purposes   of 6 

use  of  term  restricted 12 

violation  of  articles  of  incorporation 134-135A-136 

when  unsafe  to  continue  business 135 A 

Bank  Act,  annual  report  of  superintendent,  as  to 140 

applicable   to   banking  corporations 145 

effective  when    147 

in  relation  to  prior  Investments 145 

jurisdiction  in  actions  brought  under 136B 

repeals  all  acts  in  conflict 146 

short    title    of 1 


106  CALIFORNIA  BANK  ACT 

Section 

Baukinsr  business,  conducted  in  unsafe  manner 134-135A 

certificate    to    be    posted 60 

defined    2 

departmental    22 

regulation   of    12-12A-90 

unlawful   unless  duly  authorized 2 

when  advertised  must  have  certificate 12 A 

Banking-  Association,  state  banks  may  join 56 

Banking*  Corporations,  see  Corporations,  Banking. 

Banking-  Departnxent,  see  State  Banking  Department. 

Bank  premises,  departments  to  be  in  same  or  adjoining  buildings..     26 

investment  in,   by  commercial   banks 84 

Investment  in,  by  savings    banks 61 

investment  in,  by  trust  companies 105 

trust  company  may  mortgage  to  state  treasurer,  when 97 

Bills  of  exchang-e,  commercial  banks  may  buy  or  discount 80 

not  construed  to  create  debt 55 

Bills  of  leading*,  commercial  banks  may  buy  or  discount 80 

Bond  of  deputy  superintendent  of  banks 121 

of  special  deputy  superintendent  of  banks 136 

of   superintendent   of   banks 120 

Bonds  available  for  deposit  by  trust  company 96 

banks  limited  in  investing,  underwriting  or  guaranteeing 36-46 

certified,  official  list  to  be  kept 61 A 

cost  of  investigation  of 61 A 

for  deposits  by  court  order,  not  required 94 

legal  as  investment  for  savings  banks  61 

must  be  certified,  when 61-61A 

power  of  superintendent  of  banks  to  investigate 61A 

savings  banks  may  loan  on 67 

Books,  audit  of,  by  request 124 

examination  of,   by  directors 139 

inspection  of,  by  superintendent  of  banks 38 

of  departments  to  be  kept  separate 26 

refusal  of  bank  to  submit 135A-136 

Borrowed  money,  by  savings  banks  must  be  approved 62 

commercial  banks  may  pledge  assets  for,  to  what  extent 21 A 

limit   on   amount  borrowed 21A 

superintendent  of  banks  may  extend  limit 21A 

Borrower,  endorser  and  guarantor,  deemed  to  be 66 

Branch  office,  certificate  necessary  to  open 9 

effect  of  consolidation  of  cities  on 23-60-82 

shall  not  be  permitted  to  open,  when 23 

Building  and  loan  associations,  advertising,  how  restricted 12-12 A 

Bulletin,   information  to  general  public 141 

to  be  filed  as  public  document 141 

to  be  posted  by   superintendent  of  banks 141 

Business,   authorization  to  commence 127 

ceased  by  trust  company 102 

closing   of 137 

examination   of    124 

merger   of 31A 

reports  of   130-130A 

sale   of    31 

winding  up  affairs  of 136 

By-laws,  amendments  must  be  filed 8 

must  be  filed  with  superintendent  of  banks 8 

not  effective  until  filed 8 

of  savings  banks  must  prescribe  what 64 

Call  for  reports  from  banks,  how  often 131 

Called  reports,  failure  of  banks  to  make,  penalty 138 

from   banks,    how   often 131 

of  banks,  publication  of 132 

time  limited  for  banks  to  make 138 

to   contain  what 130-130A 

Capital,  advertising  of,  must  show  what 14 

apportioned   to   departments 23 

assigned  by   foreign  corporations 7 

impairment   of    133-136 

increase   or   decrease 23 

Invested    in    bank    premises,    furniture    and    fixtures    and    safe 

deposit    vaults    61-84-105 

may  be  increased  by  surplus 21 

must  be  paid  up  before  issuance  of  certificate 127 

necessary  to  open  branch  office 9 

of  commercial  bank,  relation  to  deposits 19 


INDEX  107 

Section 

of  foreign  corporations  to  be  separate 7 

of  savings  bank,  in  what  invested 61 

of  savings  bank,  relation  to  deposits 19 

of  trust  company,  how  invested 105 

of  trust  company,  in  what  invested 105 

paid  up  and  surplus  must  equal  what 19 

re-apportionment  to   departments 23 

relation  of  surplus  to 21 

restriction  as  to  loans 80 

Capital  stock,  as  collateral,  limited 44 

assessed  when   133 

banks  shall  not  invest  in  their  own 34 

banks  shall  not  loan  on  their  own 34 

commercial  bank,  amount  required    82 

directors  must  hold 10 

may  be  sold  for  assessment 133 

mutual  banks  may  issue,  how 29 

of  title  insurance  company  doing  trust  business 106 

paid  up  value  to  be  endorsed 53 

par   value    must   be 53 

reduction  of    55 

required   according   to   classification 23-60-82 

required  by  trust  company 90 

savings  bank,  amount  required 60 

Certificate  issued  by  real  estate  corporations,  legality  for  savings 

bank    61 

necessary  before   transaction  of  business 24 

necessary  for   new    department 24 

of  deposit,  not  construed  to  create  debt 55 

of  deposit,  savings  bank  may  issue 63 

of  special  deputy  superintendent  of  banks  to  be  filed 136 

of  superintendent  of  banks,  filing 128 

of  superintendent  of  banks  in  merger 31 A 

of  superintendent  of  banks  shall  be  issued,  when 128 

of  superintendent  of  banks  to  be  posted 50 

of  superintendent  of  banks  to  be  withheld,  when 127 

of  superintendent  of  banks,  to  state  what 127 

of  trust  company,  when  revoked 98 

requisite    fee    24 

revoked,  when  trust  business  ceases 102 

to   open   branch   office 9 

Certificate  of  deposit,  bank  cannot  make  partial  payments  on 21A 

Certification  of  bonds  by  superintendent  of  banks 61-61A 

of  superintendent  of  banks  not  to  obligate  the  state 61 

Certified  checks,  issuance  unlawful,  when 52 

must  be   immediately  charged 52 

Chang-e  of  investments  to  conform  to  act 145 

Checks,  certified,  must  be  charged 52 

certified,    when    unlawful 52 

Chief  deputy,  failure  to  report  insolvent  condition  of  bank 126 

Citation,  issued  by  superintendent  of  banks 134 

City,  bonds  of,  available  for  deposit  by  trust  company 96 

legality  of  bonds  of 61 

Claims  against  bank  in  liquidation 136 

objection    to,    liquidation 136 

Classification,  as  applied  to  banks  previously  organized 23-60 

of  banks 2 

of  cities,   governed   by   Federal   census 23-60 

of  cities  in  relation   to   capital  and   surplus 23-60-82 

of   trusts    101 

Collateral,  commercial  bank  may  pledge  assets  to  what  extent....  21A 

directors  to  receive  report  on 139 

Collateral  trust,  bonds,  when  legal  for  savings  banks 61 

Collections  of  deposits  by  survivors 16 

Commercial  hank  advertising,  how  regulated 28 

capital  and  surplus,  their  relation  to  deposits 19 

capital  required   82 

classified  as  to  capital  by  population 23 

definition  of    5 

how   formed   to   conduct 3 

investment  in  bank  premises 84 

loans   of,    limited 80-81 

loans  to  corporation 81-83 

loans  to  directors  and  employees 83 

loan  to  officers  prohibited 83 

may  borrow  money  to  what  extent 21A 


108  OALIFOENIA  BANK  ACT 

i. 

Section 

may  pledge  assets  to  what  extent 21A 

must  be  duly  authorized 2 

overdrafts  limited  to  ninety  days  as  assets 21 A 

overdue  interest,   how  limited 21A 

purposes  of 5 

real  estate  loans  restricted 47 

reserve  required    20 

Commercial  paper,  commercial  banks  may  buy  or  discount 80 

Commission  to  officers,  directors  and  employees  prohibited 39 

Condition,    must   be   published 132 

Consolidation,  approval  of  stockholders 31 A 

approval  of  superintendent  of  banks  required 31A 

articles  of  incorporation  and  consolidation 31 A 

how  assets  of  merged  banks  may  be  reached 31 A 

liability  of  banks   in 31A 

of  banks   31A 

of  cities,  effect  on  branch  offices 23-60-82 

rights  of  creditors   in 31 A 

Construction,  all  preceding  or  conflicting  acts  repealed 146 

create  debt    55 

Contracts,  real  estate,  not  to  be  sold  to  banks,  when 35 

with  officers,  directors,  or  employees 42 

with  savings  depositors 64 

Corporate  existence,  obligation  of  bank  after  expiration 136A 

Corporations,  consolidated    31A 

doing  title  insurance  and  trust  business 107 

for  banking,  how  formed 3 

loans  to,  by  commercial  banks 81-83 

loans  to,  by  savings  banks 65 

mutual,  may  issue  capital  stock 29 

powers  and  privileges  must  conform  to  act 145 

sale   and   purchase 31 

shall  not  use  word  "savings"  when 12-12A-49 

shall  not  use  word  "trust"  when 102 

stock,   as  collateral,   limited 44 

stock,  banks  shall  not  own 37 

Corporations,  toanliing-,  may  do  departmental  business,   when 22 

must  file  certain  papers 8 

Corporations — foreign,  as  fiscal  agents 90 

cannot  exercise  powers  of  trust  company 7 

loans  based  on  total  capitalization,  when 7 

may  act   as   executor,    when 7 

may  lend  certain  moneys  not  assigned  to  this  state 7 

may  lend  money  in  this  state 12C 

must  execute  power  of  attorney  to  superintendent  of  banks. ...        7 

powers  as  co-trustee 90 

service  of  papers 7 

service   of   process 7 

shall  not   act   as    trustee 90 

shall  report  to  state  banking  department 130 

subject  to  state  laws 7 

Costs,   in   liquidation 136 

in  sale  of  certain  real  estate 155 

Counsel,  compensation,  liquidating  delinquent  banks 136 

County,  bonds  of,  available  for  deposit  by  trust  company 96 

legality   of   bonds   of 61 

County  Clerk,  certificate  of  superintendent  of  banks  to  be  filed  with  128 

certificate  of  merger  to  be  filed  with 31A 

County  deposits  in  savings  banks 62 

Court  may  authorize  deposit  with  trust  company 91 

may  order  deposit  with  trust  company 93 

may  require  knowledge  of  private  trusts 103 

Court  trust,  definition  of 101 

to  be  separately  secured 96 

Create  debt,  meaning  of  restricted 55 

Creditors,  rights  of,  against  banks  sold 31 

rights  of,  against  merged  bank 31A 

rights  of  in  liquidation 136 

Currency  association,  state  banks  may  join 56 

Debt,  savings  banks  shall  not  contract  except 62 

Deceased  depositors,  amount  due  to  must  be  reported 15 

when  moneys  due  to,  escheat 15 

D*eds  of  trust,  legal  for  deposit  by  trust  companies 96 


INDEX  109 

Section 

Definition  of  bank 2 

of  commercial  bank   6 

of  "electrical  corporation"   61 

of  "gas  corporation"    61 

of  "pipe    line    corporation" 61 

of  public   utility    61 

of  savings   bank    4 

of  "street   railroad    corporation" 61 

of  "telegraph    corporation" 61 

of  "telephone   corporation"    61 

of  trust  company    6 

of  "water  corporation"    61 

Departmental  banks,  application  for  permission  to  conduct 23 

apportionment  of  capital  and  surplus 61 

assets  to  be  held  for  depositors,  how 27 

assets  to  be  kept  separate 26 

books  of  account  to  be  kept  separate 26 

classified  as  to  capital  by  population 23 

conducted   by   trust   company 106 

corporation  may  transact  business  of 22 

departments  to  be  in  same  or  adjoining  buildings 26 

deposits,    conditions    of   re-payment 27 

investments,    how   held 27 

may  transfer  assets,  when 25 

new  department  must  have  certificate 24 

re-apportionment   of   capital   and   surplus 61 

relation  of  departments 26 

reserve  required    25 

shall  make  separate  reports  of  departments 129 

shall  publish  statements  of  departments  separately 129 

statement  of  segregation  of  capital  and  surplus 23 

Departmental  business,  by  title  insurance  companies 107 

Deposit,   by  administrator 51 

by  assignee   51 

by  executor 51 

by  guardian     51 

by  order    of    court 51 

by  receiver    51 

by  trustees    61 

certificate  of,  savings  bank  may  issue 63 

in  national  bank  by  state  bank 48 

of  postal  savings  in  savings  banks 62 

of  trust  companies  with  state  treasurer,  to  be  increased,  when.  98 

of  trust  companies  with  state  treasurer  to  consist  of  what 96 

trust    companies   may    mortgage    premises    to    state    treasurer, 

when    97 

Depositary,  approval  by  superintendent  of  banks,  when 43 

national  bank  acting  as 48 

Depositor,  contract  with,  in  savings  bank 64 

deceased   15 

repayment  of,  by  savings  banks 64 

savings,  may  be  paid  by  draft 62 

unknown     15 

Deposits,  additional  to  be  made  by  trust  company  when 98 

advertising    for,    prohibited,    when 12 

collected  by  survivors,  when 16 

escheat  of   15 

joint     16 

lawful    reserve 20-64-105 

must  not  be  increased,  when 19 

not  construed  to  create  debt,  when 55 

of  banks   43 

of  deceased  persons,   how  collected 16 

of  foreign  corporations  to  be  separate 7 

of  married  women    16 

of  minors     16 

of  other  banks  with  savings  banks 68 

of  savings  banks  with  other  banks 68 

of  trust  company,  may  be  withdrawn  from  state  treasury 98 

of  trust  company,   securities  may   be  exchanged 96 

of  trust  company   securities,    title  and  appraisement 99 

of  trust  funds    16 

savings,  advertised 49 

savings  bank,  in  what  invested 61 

savings  bank,  repayment  of 64 

state,  county  and  municipal  in  savings  banks 62 

trust  company,  in  what  invested 106 

unclaimed    15 


110  CALIFOENIA  BANK  ACT 

Section 

unclaimed,  when  bank  suspends  business 136A 

when  exempt  from  attachment  or  sale 16 

when   preferred    51-62 

with  other  banks,  by  departments 25 

with  trust  company,  authorized  by  court 91 

with  trust  company,    by    administrator 91-92-93 

with  trust  company,   by  court  order 93 

Beputy  of  superintendent  of  banks,  qualifications  of 121 

of  superintendent  of  banks,   salary 121 

of  superintendent  of  banks  shall  execute  bond,  when 121 

Desig-nation  of  depositary 43 

Directors,  eligibility  of 10 

examination  of  bank  by _^. .   139 

in   merger    31A 

liability    for    fraud 38 

list  of,   to   be  posted 17 

may  authorize  loans  to  directors,  agents  or  employees 83 

may  be  removed,  when 10 

may  declare  dividend,   when 21 

may  employ  assistance  in  examinations      139 

may  sell  no  bond  or  contract  to  bank,  when 35 

may  sell   stock  for  assessment 133 

must  hold  monthly  meetings 11 

oath  of   11 

of  commercial  bank,  loans  to 83 

of  savings  bank  in  relation  to  corporation  loans 65 

of  savings  banks,  loans  to,  prohibited 65 

of  savings  bank,  shall  not  be  endorsers 65 

overdraft  of,   prohibited 39 

purchase  of  assets  of  bank  by 42 

qualifications  of   10-11 

restriction  on  purchase  of  obligations  of  bank  by 41 

shall   levy   assessment,   when 133 

shall   not   receive    commission 39 

Discount,  banks  of 5 

on  bills  of  lading  or  bills  of  exchange,  amount  of 80 

on  commercial  or  business  paper,  amount  of 80 

Dissolution,  banks  shall  have  right  to  make  application  for 137 

causes  for    136 

proceedings   in    136-137 

Dividends,  accrued  but  unpaid  interest  not  calculated 45 

by  banks  holding  illegal  securities 145 

directors  may  declare  under  what  conditions 21 

escheat  to  state,  when 137 

from  banks  in  liquidation 136 

in  receivers'  hands,  how  disposed  of 137 

of  savings  banks,  how  restricted 64 

of  suspended  banks 136 A 

paid  out  on  court  order 137 

trust  company  may  receive,  on  securities  deposited 96 

when  escheated  to  state,  invested  how 137 

Draft,  savings  depositors  may  be  paid  by 62 

Earningrs,  disposition  of  21 

Electrical  corporation,  definition  of 61 

Eligibility  of  directors 10 

Employees,  liability  for  fraud 38 

may  sell  no  bond  or  contract  to  bank,  when 35 

of  commercial  bank,  loans  to 83 

of  savings  bank,  may  borrow  funds 65 

of  state    banking    department 121 

overdraft  of,   prohibited 39 

purchase  of  assets  of  banks  by 42 

restrictions  on  purchase  of  obligations  of  bank  by 41 

shall  not  receive  commission 39 

Endorser,  deemed  to  be  borrower,  when 66 

Entries,  penalty  for  false 38 

Escheat  of  deposits,  duty  of  attorney  general  in  action 15 

Examination,  at  expense  of  bank,  when 138 

causes  for  dissolution 134-136 

of  banks,  before  issuance  of  certificate 127 

of  banks  by   directors 139 

of  banks,  special 124 

of  banks  upon  failure  to  report 138 

of  national   banks 48 

of  organization  documents  by  superintendent  of  banks 8-127 

of  securities  for  deposit   by  trust  companies 96-97-98-99 

special   per   diem   charged 124 


INDEX  111 

Section 

Examiner,  failure  to  report  insolvency 126 

may    administer    oath 124 

must    take   constitutional    oath 125 

oath  of,  must  be  filed,  where 125 

of  state   banking  department 121 

shall  not  be  appointed  receiver,  when 125 

Execution,  deposit  of  married  woman  or  minor  exempt  from,  except     16 

Executor,    deposits    by 51-91-93 

foreign  corporation  may  act,  when 7 

trust  company  may  act  as 6-90 

trust  company,  oath  required 90 

Existence,  corporate,  obligations  after  expiration  of 136A 

Expense  of  state  banking  department 122-123-124 

Fee  for  appraisal  of  trust  company  securities 99 

for  branch  office 9 

for  certificate   24 

for  examination  of  title  of  trust  company  securities 99 

for  filing  proceedings  in  liquidation 136B 

for  investigating    bonds 61A 

for  serving  process  on  foreign  corporations 7 

for  special    examination 124 

Filing*  of  certificate  of  superintendent  of  banks 128 

of  directors'  examinations 139 

of  documents   preliminary   to   organization 8 

of  list  of  unclaimed  deposits 15 

of  proceedings    in    liquidation 136B 

Fiscal  agrent,  foreign  corporation  as 90 

Foreigrn  lianks,   inspection  of 124 

Foreigrn  corporations,  see  Corporations — foreign 

Forfeiture,  causes  for  dissolution 134-136 

of  bank,  recovered  how 144 

unauthorized    banking    prohibited 12-12A-49 

unlawfully  opening  branch  office 9 

Funds  of  receiver,  escheat  to  state,  when 137 

of  state  banking  department 123 

paid  into  county  treasury  by  receiver,  when 137 

paid  out  on  court  order 137 

when  escheated  to  state,  invested  how 137 

Furniture  and  fixtures  for  offices  of  state  banking  department 122 

investment  in,  by  commercial  banks 84 

investment  in,  by  savings    banks 61 

investment  in,  by  trust  companies 105 

Gas  corporations,  definition  of 61 

Government  bonds  available  for  deposit  by  trust  company 96 

legality  of  bonds  of 61 

Governor,  annual  report  of  superintendent  of  banks  to  be  made  to. .   140 

superintendent  of  banks  appointed  by 120 

Gratuities   to  officers  prohibited 39 

Guarantee  of  banks  restricted 36 

Guarantor  deemed  to  be  borrower 66 

Guardian,  affidavit  of,  must  be  accompanied  by  letters  of  guardian- 
ship         16 

deposits    by 51-91-93 

may  collect  deposit,  when 16 

must  file  affidavit  with  bank,  when 16 

trust  company  may  be,  for  estate 90 

trust   company,   oath   required 90 

Hypothecation   of   assets 21A 

Impairment  of  capital  stock 133-136 

Incorporation,  see  Articles  of  Incorporation. 

Information  accessible  to  general  public 141 

bulletin  posted  in  office  of  superintendent  of  banks 141 

for   public    17 

on  file   for   stockholders 17 

Injunction  against  superintendent  of  banks 134-136 

restraining  use  of  words  or  terms 12 

Insolvent  bank,   duties  of  superintendent  of  banks 136 

bank,  failure  to  report 126 

upon  failure  to  restore  reserve 20 

Inspection  of  all  banks  once  a  year 124 

special   when   necessary 124 

Interest  accrued,  "but  unpaid,  not  profits,  when 45 

on  deposits  of  trust  funds 95 

overdue  one  year,  debt  considered  bad 21 A 

trust  company  may  receive  on  securities  deposited 96 


112  CALIFOBNIA  BANE  ACT 

Inventory,   liquidation  of  delinquent  banks f f  13? 

Investig-ation  of  bonds  and  securities  by  superintendent  of  banks..  61A 

of  bonds  and  securities,  cost  of 61A 

of  fitness   of   stockholders 12g 

Investment  certificates,  building  and  loan  associations  may  issue..  12 A 

Investments,  bank  shall  not  invest  in  own  stock 34 

by  savings  banks  after  July  1,  1909,  legality  of 66 

changed  to  conform  to  act,  how 145 

illegal,  to  be  written  ofe 145 

in    bonds,    limited 36-46 

in  stock  of  corporations  prohibited,  except 37 

of  departments  held  for  depositors 27 

of  each  department,  must  be  separate 26 

of  trust   funds,   how   regulated 105 

trust  company,  how  governed 106 

Irrlg-ation  district  bonds,  legality  of 61 

Joint  deposits,  savings  bank  deposit  in  name  of  two  or  more  per- 
sons           16 

Judgment  dissolving  banks,  superintendent  of  banks  may  procure.  135A 

Jurisdiction  in  actions  brought  under  bank  act 136B 

law,  banking,  effective,  when _. 147 

Iiawfxa  reserve,  trust  funds  not  to  be  carried  as 32 

lesrality  of  bonds  or  notes  for  savings  banks 61 

of  investments  prior  to  this  act 145 

Iietters  of  administration,  certain  heirs  need  not  procure,  when....     16 

Ziiabilities,  advertising  to  be  separate 14 

shall  not  be  increased,  when 20 

Xilability  for  making  false  statement 88 

of  directors,  ofticer  or  employees  for  fraud 38 

of  stockholders,  cannot  be  waived 40 

X^icense,  forfeiture  of 98-134-136 

to  banks     127 

to  begin  business,  fee  for 24 

to  foreign    corporations 7 

to  open   branch   offices 9 

to  trust  companies 127 

tife  insurance  companies,  use  of  word  "trust"  by  foreign 12B 

Iiimit,    "borrowed   money,"   amount   of 21A 

of  amount  of  real  estate  loans 47-67-105 

of  deposit    liabilities 19 

of  deposit  of  savings  banks  in  any  one  bank 68 

of  investment  in  safe  deposit  department 30 

of  loans    by    commercial    banks 47-80 

of  loans   by   savings   banks 66-67 

of  loans  by   trust  companies 105 

of  loans  on  bank  or  corporation  stock 44 

of  purchase,  underwriting  or  guaranteeing  bonds 36 

of  time  for  holding  real  estate 54 

on  deferred  payment  of  interest 21 A 

superintendent  of  banks  may  extend,  on  money  borrowed 21 A 

S^iguidation,   banks   in,   claims   against 136 

banks  in,  names  to  be  posted 141 

compensation   of  counsel   in 136 

costs   in    i  iv 

filing  of  proceedings  in •'• ,  oe 

of  banks  b3'-  superintendent  of  banks •  •  • .   136 

of  banks,  voluntary   1  ol 

proceedings,   notice  to   banks , •    136 

voluntary,  superintendent  of  banks  may  take  possession j^eV" 

when  corporate  existence  expires 136A 

Loans,  bank  shall  not  loan  on  own  stock 34 

by  commercial  banks,  how  limited 47-80-81 

by  commercial  banks,  to  officers,  directors  and  employees 83 

by  foreign    corporations •/,«  eli 

by  savings   banks,  how  limited """51 

by  savings   banks,   prohibited,    when 68 

by  savings  banks,   renewal  of .••.••; 5? 

by  savings  banks  to  directors  or  officers,  prohibited 65 

on  corporation  or  bank  stock,  limited 44 

real  estate 4 J 

savings  banks,  effect  of  public  utilities  act 61 

shall  not  be  increased,  when Uc  o2 

to  corporations,   directors   or  officers   interested eeof 

to  directors  or  employees •  •  ^5-83 

trust  company,  how   governed 105-106 

when  savings  banks  must  not  make  new  4 64 


INDEX  113 

Section 

]Doc»tion,  powers  as  affected  by  consolidation  of  cities 23-60-82 

powers  of  banks  dependent  upon 23-60-82 

powers  of  trust  companies  dependent  upon 23-90 

]Q088«s,  may  be  charged  to  surplus,  when 21 

reserve  fund  may  be  charged  with 64 

shall  be  written  off,  when 21A 

Married  woman,  deposits  of 16 

Ueeting*  of  directors  once  a  month 11 

of  members  of  mutual  bank  to  capitalize 29 

of  stockholders,  superintendent  of  banks  may  call 135 

Uembers  of  bank  may  make  application  to  dissolve 137 

of  mutual  bank  may  elect  to  capitalize 29 

Mersrer,  see  Consolidation. 

Mining-  stock,  loans  on  by  savings  banks,  prohibited 67 

Minor,   deposits  of 16 

trust  company  guardian  of  estate  only 90 

Money,  amount  of  lawful  reserve  to  be  kept  on  hand 20 

reserve  of  savings  banks 68 

Mortgraare,  deposited  by  trust  company  with  state  treasurer 97 

of  trust  company  deposited,  title  and  appraisement 99 

restriction  as  to  loans  on 47-67 

sale  to  banks  by  officers,  etc.,  permitted  when 35 

Municipal  deposits  in  savings  banks 62 

Mutual  bank,  how  reserve  fund  shall  be  increased 64 

may  have  capital  stock 29 

payment  of  losses  out  of  reserve  fund,  when 64 

relation  of  reserve  fund  to  deposits 64 

STame,  restrictions  on 12-12 A-12B-12C-49 

National  bank,  examination  of  as  depositary 48 

National  Beserve  Association,  state  banks  may  join 56 

Notes,  legal  for  savings  banks,  when 61 

Notice  of  assessment  of  stock 133 

of  liquidation  to  all  banks 136 

required  by  savings  banks  from  depositors 64 

Oath  of  bank  examiner 125 

of    directors 11 

of  office  of  superintendent  of  banks 120 

refusal  of  officers  to  be  sworn,  penalty  for 135A-136 

who  may  administer 124 

Officer,  liability  for  fraud 38 

may  sell  note,  bond  or  contract  to  bank,  when 35 

of  bank,  loans  to,  prohibited 65-83-105 

of  savings  bank  in  relation  to  corporation  loans 65 

of  savings  bank,  shall  not  be  endorser 65 

of  trust  company  entitled  to  knowledge  of  private  trusts 103 

overdraft  by,  prohibited 39 

purchase  of  assets  of  bank,  by 42 

refusal  to  be  examined  on  oafh 135A-136 

restriction  on  purchase  of  obligations  of  banks  by 41 

shall  not  receive  commission 39 

Offices  of  state  banking  department 122 

Official  reports  of  superintendent  of  banks,  prima  facie  evidence. .   142 

Order,  refusal  of  bank  to  observe 136 

to  show  cause  issued  by  superintendent  of  banks 134 

Orgranization  of  bank,  examination  of  documents 8-127 

of  banking  corporation,  papers  to  be  filed 8 

of   trust   companies 90 

Overdraft,  limited  to  ninety  days  as  asset 21A 

prohibited  to  officers,  employees,  etc 89 

Par  value  of  capital  stock,  minimum 53 

Payment  of  expenses  of  banking  department 123-124 

suspended  by  bank,  cause  for  dissolution 185A-1S6 

Payment  of  deposits  by  savings  banks,  notice  required,  when 64 

of   two   name 16 

to  married  women 16 

to    minor 16 

Penalties  to  be  paid  into  state  banking  fund 144 

recoverable    how 144 

Percentagre  of  reserve  required  by  savings  banks 68 

Per  diem  charged  for  special  examinations 124 

Personal  property,  savings  banks  may  loan  on 67 

Petition  of  stockholders  for  dissolution 187 

Pipe  line  corporation,  definition  of 61 


114  CALIFOBNIA  BANE  ACT 

Section 
Place  of  BnsinMS,  see  Location. 

Pledgred,  stock  of  directors  must  not  be 11 

Population,  in  relation  to  capital  governed  by  federal  census 23 

see   Location. 

Postal  savlnfifs  deposited  in  savings  banks 62 

deposits  of  shall  not  be  construed  as  "borrowed  money" 21A 

Powers,  building  and  loan  associations,  restrictions  on 12-12A 

of    banks 2-4-5-6 

of    commercial    banks 6 

of  savings  banks    4 

of   trust    companies 6 

Preferred  claims,  deposits  by  order  of  court 51 

deposits  of  postal    savings    as 62 

deposits  of  public   moneys   as 62 

Preferred  creditors,  bank  shall  not  pledge  assets  except 21A 

Preferred  stock,  unlawful  for  banks 53 

President,  loans  to,  prohibited 65-83-105 

publication  of  unclaimed  deposits  15 

verification   of   reports 130-130A 

Principal  office   26 

Private  trust  definition  of 101 

not  subject  to  inspection  of  superintendent  of  banks 101 

officers  entitled  to  knowledge  of 108 

to  be  separately  secured 96 

trustees  shall  not  disclose,  what 103 

Proceeding's  against  bank,  reports  are  prima  facie  evidence 142 

in    dissolution 136-137 

in  liquidation,  filing  of 136B 

to  enjoin  superintendent  of  banks 134-136 

when  banks  are  merged 31A 

when  bank  sells  assets 31 

when  capital  of  bank  is  impaired 133 

when  reserve  falls  below  required  amount 20 

Process,  service  on  foreign  corporations 7 

Profit  and  loss,  certain  debts  charged  off  to,  when 21 A 

Profits  accrued,  but  uncollected  interest  not  to  be  included  in 45 

Public,    information    for 17-141 

Public  administrator,  deposits  of,  with  trust  company 92 

may  deposit  with  any  bank,  when 51 

may  deposit  with  savings  bank,  when 68% 

Publication,  deceased  depositors,   list  of 16 

of  false   statement,   penalty    for 38 

of  notice  of  agreement  of  sale  and  purchase 31 

of  notice  of  assessment  of  stock 133 

of  notice  of  liquidation 136 

of  notice  of  mutual  bank  to  capitalize 29 

of  notice  of  sale,  affidavit  to  be  filed 31 

of  report  to  superintendent  of  banks 132 

of  sale  of  real   estate   by   court 54 

unknown  depositors,   list  of 15 

Public  moneys  deposited  in  savings  banks 62 

deposit  of,  shall  not  be  construed  as  "borrowed  money" 21A 

Public  Utilities  Act,   effect  on  loans  and  investments  by  savings 

banks    61 

Public  utility  bonds,  when  legal  for  savings  banks 61 

definition    of 61 

Purchase  of  assets  of  banks  by  officers,  directors,  etc 42 

of  banks     31 

of  departments  of  banks 81 

of  obligations  of  banks  by  directors,  etc 41 

Purposes  of  commercial   banks 6 

of  savings    banks 4 

of  title  insurance  and  trust  company  restricted 22 

of  trust  company 6 

Bailroad  bonds,  when  legal  for  savings  banks 61 

Ratio  of  capital  and  surplus  to  deposit  liabilities 19 

of  reserve  to  deposit  liabilities 20-68-105 

Seal  estate,  contract  not  to  be  sold  to  bank,  when 85 

corporation  certificates,  when  legal  for  savings  banks 61 

held  longer  than  five  years,  proceedings  for  sale  of 54 

loans  on,  by    commercial    bank 47 

loans  on,  by   savings   bank 67 

mortgaged  as  deposit  by  trust  company 96 

when  second  mortgages  on,  permitted 47 

Reapportionment  of  capital  and  surplus  to  departments 23 


INDEX  115 

Section 

Seceiver  appointed  prior  to  July  1,  1909 137 

bank  examiner  shall  not  act,  when 125 

deposits   by 61 

funds  of,  escheat  to  state,  when 137 

funds  of,  held  in  county  treasury  when 137 

trust  company,   oath   required 90 

savings  bank,  payment  to  one  of  two  or  more  persons 16 

Report,  annual,  of  superintendent  of  banks  to  governor 140 

failure  of  bank  to  make,  penalty 138 

loans  to  agents  or  employees  of  savings  banks 65 

loans  to  directors  and  employees  of  commercial  banks 83 

of  banks,  called  for  how  often 131 

of  banks,    publication    of 132 

of  banks,  shall  contain  what 180 

of  banks,  time  to  make  limited 138 

of  banks  to  state  banking  department 130 

of  examination    by    directors 139 

official,  of  superintendent  of  banks,  prima  facie  evidence 142 

special,  to  superintendent  of  banks 130A 

trust  company  must  report,   what 98-101 

weekly    bulletin    by    superintendent   of   banks 141 

Begerve  for  departmental  bank 26 

how  shall  be  restored 20 

of  commercial  banks,  relation  to  deposits 20 

of  departments  to  be  kept  separate 25 

of  savings   banks    6g 

of  savings  banks,  relation  to  deposits 19 

percentage  may  be  kept  in  eastern  cities 20 

required  for  commercial  banks 20 

trust  company,  how  governed 106 

B«B«ryo  fond,  mutual  savings  banks,  required 60 

of  mutual  savings  bank,  may  be  used  how 64 

Besources,  advertising  to  be  separate 14 

Bevolving-  fiind,  superintendent  of  banks  may  retain 123 

Safe  deposit  department,  any  bank  may  conduct 30 

investment  in,  by  commercial  bank 84 

investment  in,  by  savings    bank 61 

investment  in,  by  trust  company 105 

Safety  deposits,   in   insolvent   bank 136 

Salary  of  employees  of  state  banking  department 121 

of  superintendent  of  banks 120 

Sale  of  banks  or  departments 31 

SavinfiTs  of  school  children 9 

shall  not  be  advertised  by  whom 12-12A-49 

Savings  bank  advertising,   how  regulated 28 

bonds  and  notes  when  legal  for  investment 61 

borrowed   money,   approval   of 62 

by-laws   must  prescribe   what 64 

capital  and  surplus,  their  relation  to  deposits 19 

capital  stock  required 60 

classified  as  to  capital  by  population 23 

contracts   with   depositors 64 

corporation  loans,  directors  or  officers  interested 65 

county  deposits  in 62 

definition  of    4 

department,    reserve    required 68 

depositors,  may  be  paid  by  draft 62 

deposits  of  other  banks  with 68 

employees  or  agents  may  borrow  funds 65 

how  formed  to  conduct 3 

investment  in  bank  premises 61 

investments,  effect  of  public  utilities  act 61 

investments,  legality  of 66 

loans,  effect  of  public  utilities  act 61 

loans,  must  be  secured,  how 67 

loans    of,    limited 66 

loans  to  directors  and  officers  prohibited 65 

may  borrow    postal   savings 62 

may  borrow    public    money 62 

may  issue  certificates  of  deposit 63 

municipal   deposits   in 62 

must  be   conducted,   how 69 

must  be    duly    organized 2 

must  not  make  new  loans,  when 64 

mutual  reserve  fund  of,  must  be  increased,  when 64 

mutual  reserve  fund,  when  required 60 

only,  to  receive  savings  deposits 49 


116  CALIFOBNIA  BANE  ACT 

,     ,      .  .  Section 

organized  without  capital  stock 60 

purposes    of    4 

real  estate  certificates,  when  legal  for  investment 61 

real  property  may  be  purchased  or  held 61 

reserve    required    68 

securities  hypothecated,  approval  of 62 

shall  not  contract  debt,  except 62 

use  of  term   restricted 12-12A-49 

without  capital  stock  reserve  fund  must  equal  what 19 

Saving's  department  investments  to  be  separate 26 

Savingrs  deposits,  advertising  for,  prohibited,  when 12-12A 

School  district,  bonds  of,  available  for  deposit  by  trust  company...     96 

legality   of  bonds   of 61 

School    saving-s,   how   deposited 9 

regulations   concerning , 9 

Seal  of  superintendent  of  banks 134 

Second  mortgrag'e,  when  bank  may  loan  on 47-67 

Secretary  of  state  shall  certify  documents  when 8 

Securities,  additional  deposit  of,  by  trust  company 98 

certified,  official  list  to  be  kept 61A 

cost  of  investigation  of 61A 

deposited  by  trust  company,  examination  of 96-97-98-99 

exchange  of,  by  trust  companies 96 

hypothecated  by  savings  bank 62 

illegally  held  by  banks 145 

power  of  superintendent  of  banks  to  investigate 61 A 

withdrawal  of,  by  trust  companies 98 

Security  percentage,  for  savings  bank  loans 67 

Service  of  papers  on  foreign  corporations 7 

Signs  of  banks  must  show  what 28 

Special  deputy  superintendent  of  banks 136 

Special  report  of  banks,  superintendent  of  banks  may  require 130A 

State  law,  violated  by  banks 134-135A-136 

legality  of  bonds   of 61 

shall  be  responsible  for  securities  deposited  by  trust  company. .     96 

State  hanbiugf  department,  assistants 121 

attorney    121 

banks  must  report  to 130 

bulletin  to  be  filed  as  public  document 141 

chief  deputy,  failure  to  report  insolvent  condition 126 

chief  deputy,  qualification  of 121 

created 120 

examiner,  failure  to  report  insolvent  condition 126 

examiner  of,  must  file  oath 125 

examiner  of,  shall  not  act  as  receiver,  when 125 

examiners    121 

fund   of    123 

information  to  be  posted  in  ofCice 141 

officials  of,  cannot  borrow  from  state  banks 121 

provision   for   offices 122 

special    report    to ,..130A 

State  banking-  fund,  amount  of 128 

banks  shall  be  assessed  for 123 

method  of  assessing  banks 123 

salaries  paid  out  of 123 

State  deposits  in  savings  banks 62 

Statement  of  all  banks,  to  be  submitted  to  Governor 140 

State  of  California,  bonds  of,  available  for  deposit  by  trust  com- 
pany         96 

State  Treasurer,  deposit  with,  by  trust  company 90 

may  accept  mortgage  on  trust  company  premises,  when 97 

to  receive  deposits  of  trust  company  securities 96 

Stationery  of  banks  must  show  what 28 

Statute  of  limitations  on  sale  of  bank  or  department SI 

Stock  as  collateral,  limited 44 

impairment  of    133-186 

Investment    in,    prohibited 37 

number  of  shares  held  by  directors  to  be  posted 17 

par    value    minimum 58 

preferred  prohibited    5S 


INDEX  117 

Section 
BtocUxoldexs,  controlling,  may  sell  note,  bond  or  contract  to  bank, 

when    35 

Information    for 17 

fitness  of,  investigation  of 128 

liability  of,  cannot  be  waived 40 

liability  of,  in  sale 31 

may  elect  receiver,   when 136 

may  malce  application  to  dissolve 137 

meeting  of,  may  be  called  by  superintendent  of  banks 135 

must  be  notified  of  assessment 133 

must  confirm  consolidation 31 A 

names  of,  to  be  on  file 17 

refusal  to  pay  assessment 133 

Stockholders'  meeting",  superintendent  of  banks  may  call 135 

Street  railroad  corporation,  definition  of 61 

Somiuoxis,  service  on  foreign  corporations 7 

Superintendent  of  banks,  action  by,  to  procure  judgment  of  dissolu- 
tion   135A 

annual  report  to   Governor 140 

appointment   of    120 

approval  of  capital  and  surplus  apportioned 23 

approval  of  depositary,  when 43 

approval  to  open   branch   office 9 

approval  to  transact    banking    business 127 

authority  to  liquidate  bank 136 

bond   required 120 

bulletin  to  be  posted  in  office  of 141 

certificate   of    127 

certificate  of,  to  be  posted 50 

consent  necessary  to  do  departmental  business 23 

copy  of  corporate  papers  to  be  filed  with 8 

foreign  corporations  subject  to  supervision 7 

holds  office  at  pleasure  of  Governor 120 

issuance  of  order  to  show  cause,  when 134 

liquidation    by    136 

may  appoint    special    deputies 136 

may  authorize  additional  deposits  by  trust  company 98 

may  authorize  deposits  by   trust  company 96 

may  authorize  exchange  of  trust  company  securities 96 

may  authorize  withdrawal  of  trust  company  deposits,  when...     98 

may  call  meeting  of  stockholders 135 

may  enforce   stockholders'   liability 136 

may  examine   national   banks,   when 48 

may  make    extra    examinations 124 

may  require    special    report 130A 

may  retain  revolving  fund 123 

may  take  possession  of  unsound  bank 136 

must  not  issue  certificate  until 8 

oath  of  office 120 

official  reports  prima  facie  evidence 142 

official    seal    of 134 

powers   of    124 

power  to  examine  foreign   corporations 124 

power  to  investigate  bonds  and  securities 61A 

reports   of   banks   to ISO 

report  to,  by  banks,  how  often 131 

report  to,  by  banks,  to  be  published 132 

salary    120 

shall  be  appointed  attorney  of  foreign  corporations,  when 7 

shall  direct   discontinuance   of  unsound  practices 134 

shall  file  copy  of  license  with  county  clerk 128 

shall   give   notice   of   liquidation   proceedings 186 

shall  not  be  connected  with  banks 120 

shall  not  inspect  private  trusts 101 

shall  provide  auditor,  when 124 

shall  require  banks  to  repair  capital,  when 138 

trust  company  must  report,  what 98 

Superior  Court,  as  to  conflicting  claims,  liquidation  of  banks 136 

winding  up  affairs  of  bank 136 

Surplus,  advertising  of,  shall  be  separate 14 

apportioned   to   departments 28 

maximum    necessary   to    maintain 21 

may  be  converted  into  capital 21 

of  savings  bank,  in  what  invested 61 

of  trust  company,  in  what  invested 105 

one-tenth  of  net  profits  to  be  added  before  dividend 21 

re-apportionment  to  departments 23 

when  may  be  used  to  pay  losses 21 


118  CALIFOBNIA  BANK  ACT 

Section 
Survivixig'  relatives  may  collect  deposit,  when ic 

Survivor,  joint  deposit  to  be  paid  to 16 

Telegraph  corporations,   definition   of    61 

Telephone  corporation,  definition  of 61 

Title    of    act 1 

to  accompany  mortgage  deposited  by  trust  company 99 

Title  insurance  company  doing  trust  business 106-107 

shall  not  conduct  commercial  or  savings  bank 22 

trust  department,   application  of  law 107 

trust  department,  assessment  for  state  banking  department 107 

trust  department,  must  report  to  superintendent  of  banks 107 

trust  department,  subject  to  supervision 107 

Transfer  of  assets  and  liabilities   by  bank    31 

Trust  department,  affairs  shall  be  separate 90 

Trust  company,  additional  deposits  by,  to  be  authorized 98 

additional  deposit  with  state  treasurer,  when 98 

additional  powers  dependent    upon    location 90 

additional  powers  of    certain    companies 106-107 

additional  report   required 101 

advertising,    how    regulated 28 

affidavit  to  be  made  before  commencing  business 90 

appointment  as  trustee,  bond  not  required  except 94 

articles   of   incorporation 90 

capital  required 90 

causes  for  dissolution 134-136 

court   trusts    96 

definition   of    6 

departmental   business    106 

deposits  by,  to  be  authorized 96 

deposits  with,   authorized   by   court 91 

deposits  with,  by   court   order 93 

deposits  with,  how  secured 98 

deposits  with  state  treasurer 96-97-98-99 

exchange  of  securities  deposited  by,  to  be  authorized 96 

how  formed   to  conduct 3 

interest  or  dividends  on  securities  deposited 96 

investment  of  trust  funds 94 

knowledge  of  private  trust  confidential 103 

lawful  reserve  of 105 

liquidation     of 136 

may  act  as  executor 6-90 

may  mortgage  premises  to  state  treasurer,  when 97 

may  withdraw  securities  from  state  treasurer,  when 98 

must  be  duly  organized 2 

must  not  be  foreign  corporation,  except 7 

notification  of  increase  in  trusts  to  be  made 98 

oath  as  executor  required 90 

powers   of    6 

private    trusts    96 

private  trusts,   confidential    103 

provisions  for  ceasing  business 102 

purposes  of   6 

qualifications  90 

restriction   on    investments 105 

revocation  of  certificate  shall  not  affect  trusts 98 

securities  deposited  may  be  exchanged 96 

shall   pay   interest   on   deposits 95 

title  and  appraisement  to  accompany  mortgage  deposited  with 

state    99 

trust   funds,    meaning   of   term 98 

trusts    classified    101 

use   of    term    restricted 12-12 A-12B 

Trust  department  may  deposit  with  department  of  same  corpora- 
tion          25 

operated   by   title  insurance  company. 106-107 

Trustee,   deposits   by 51 

foreign  corporations  prohibited  to  act  as,  except 90 

Trust  fujids,  deposits   of 16 

interest  on,  as  provided  by  court 95 

investments,    how    regulated 105 

meaning   of   term 98 

shall  not  be  counted  as  reserve 32 

shall  not  be  mingled 32 


INDEX  119 

Section 

Trusts,  how  classified   101 

Unclaimed  deposits,  escheat  of 15 

publication  of 15 

Underwriting-  of  bonds,  limited 86 

Undivided  profits,  one-tenth  to  be  carried  to  surplus  before  dividend     21 

shall  not  be  combined  with  surplus  in  advertising 14 

United  States  bonds  available  for  deposit  by  trust  company 96 

legality   of  bonds,  of 61 

Unknown   depositors    15 

Unsafe  practices,  penalty  for 134-136 

Vacancy  in  office  of  superintendent  of  banks,  how  filled 121 

Violation  of  any  law  of  state 134-135A-136 

Voluntary  liquidation  of  banks 136A-137 

Warning*  to  discontinue  violation  of  law 134 

Water  corporation,  definition  of 61 

Withdrawal  of  savings  deposits,  conditions  of 64 

of  securities  by  trust  company 96-102 


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